TORONTO (miningweekly.com) – Executives at Romarco Minerals took pains on Monday to emphasise the “positives” associated with a decision by the US Army Corps of Engineers to request an environmental-impact-statement (EIS) process for the company's flagship Haile project in South Carolina, rather than the simpler environmental assessment (EA) Romarco was hoping for.
The company's shares dropped 7.3% on the news, which was announced on Saturday, to close at C$1.52 apiece by 15:59 in Toronto on Monday. The stock traded as low as C$1.30 earlier in the day.
The EIS process will delay the development of Haile by an estimated 12 months, CEO Diane Garrett said on Monday.
The company had previously planned to have its permits and financing in place by the end of this year and start construction early in 2012.
Speaking on a conference call, both Garrett and COO Jim Arnold conceded disappointment at the decision, but argued that there are some benefits to completing the EIS process, including that it will eliminate the risk of a challenge to an EA decision at a future point.
“We are disappointed there is going to be a delay to our start-up schedule by an additional 12 months, but the EIS decision does actually represent some good things for the company and for the shareholders,” Garrett said.
The company will use the time to optimise its mine plan and conduct additional exploration. It will also advance work on an underground study at Haile.
“There is a lot we can do over this next year,” Garrett said. “Nobody is sitting at Haile just twiddling their thumbs.”
The Corps has requested an EIS for impacts to a portion of the low-functioning and impaired wetlands and streams on site at Haile.
The study will be conducted by an independent contractor. Romarco will have input into the selection process for the contractor but the final decision rests with the Corps.
The Haile project is expected to cost $275-million, according to a feasibility study published this year.
Production will average 150 000 oz/y in the first five years, at average cash costs during the same period of $347/oz.
The mine has proven and probable reserves of two-million ounces of gold, based on the $950/oz gold price assumed in the feasibility study.
Romarco has spent more than $4-million on studies to evaluate the environmental impact of the proposed mine, and Garrett said she does not expect to spend more than around $2-million in connection with the EIS process, given the amount of information already compiled by the company.