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WPG refocuses on cash

7th June 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Gold producer WPG Resources has told shareholders that the company was working on cash generation to reduce its debt and creditor balance over the next nine months.

The company on Thursday said that discussions with potential third party funders were also advancing to refinance debt and pursue new opportunities at the Challenger Deeps project, in Western Australia.

The miner noted that new capital investment would be required to fund the ongoing development of Challenger Deeps, as well as to fund exploration at WPG’s other project areas.

Meanwhile, WPG told shareholders that it was in the midst of developing a new strategy at the Challenger mine, focused on mining operations on the 115 m RL and 95 m RL levels, along with remnant opportunities in the shallower parts of the mine.

The new plan is expected to minimise capital expenditure in the near term, which will improve cash generation that would assist in reducing the company’s debt.

WPG is yet to finalise and fully commit to the plan, the company said, adding that if implemented, the plan would retain the critical infrastructure at Challenger and allow the re-entry into the deeper parts of the mine in future.

Furthermore, the plan would not sterilize Challenger Deeps, and would allow future mining in the area, once the full potential of the zone was better understood.

If implemented, the new plan would have no material impact on gold production until 2019.

WPG on Thursday also adjusted its yearly production guidance, after the miner failed to reach its May forecast of 6 500 oz.

Around 5 200 oz of gold was produced during the month of May, owing to a number of unplanned events, which included the loss of a mineralised pod in a high grade stope when a rockfall temporarily buried a remote bogging unit, as well as issues in the mill caused by wet and sticky high-grade Tarcoola ore at the end of the month.

This resulted in nearly 30 hours of unplanned mill downtime, WPG said.

Additionally, the rescheduling of pit operations at the Tarcoola mine was also expected to impact June’s production forecast, which is now at 8 500 oz, with annual production expected to reach 56 000 oz.

Edited by Creamer Media Reporter

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