JOHANNEBSURG (miningweekly.com) – Africa-focused Aureus Mining has signed a $10-million liquidity facility with Rand Merchant Bank and Nedbank, as well as an $11.5-million brokered equity financing deal, at a price of 5p a share, with GMP Securities Europe and Numis Securities.
The agreement with GMP and Numis would see a private placement of 153-million new Aureus common shares to raise proceeds.
The funds would be used to strengthen the company's balance sheet, while allowing Aureus to reduce its accounts payable, facilitating the procurement of additional mining equipment, which would enable accelerated mining of its 900 000 oz New Liberty mine, in Liberia, to compensate for lost production and to reduce the waste stripping shortfall.
Aureus believed it could deliver on the production and cost estimates, which, at the prevailing gold price, should see it generate sufficient cash flow to meet its continuing obligations, including its $6.6-million debt repayments until the end of 2016.
The debt repayment was due in January 2017.
With the benefit of the accelerated mining rate, made possible by the planned addition of the new mining fleet, all-in sustaining cost (AISC) was now estimated at $820/oz over the mine life, with cash costs higher in earlier years owing to higher stripping ratios.
Aureus expected to meet production guidance for 2016 of about 125 000 oz at an AISC of $959/oz.
"Aureus has faced the challenges of a low gold price environment combined with issues associated with the impact of the Ebola outbreak in Liberia and the commissioning and ramp-up of production at New Liberty, resulting in a delay to commercial production.
“[Reducing our] creditor balance to a normal operating level will allow additional mining equipment to be procured, which will accelerate the mining rate and allow the company to reduce the shortfall in waste mining tonnage.
“While we have experienced some unexpected incidents during the commissioning phase, which resulted in a longer ramp-up to commercial production than we had hoped, the New Liberty mine has now operated successfully at an average of 92% of design capacity for the past 27 days and we look forward to declaring commercial production in the new year,” CEO David Reading said.