TORONTO (miningweekly.com) – Caterpillar Financial Services Corporation, Macquarie Bank and Societe Generale Corporate & Investment Banking have informed TSX-listed project developer Romarco Minerals that it was necessary to extend the closure of a binding commitment for a $200-million senior secured project debt facility by 30 days to April 2.
The extension would allow the lenders to finalise documentation, including a final review of the financial model that had recently been updated, based on an updated technical report filed in December.
All other terms of the commitment remained the same.
After receiving all necessary permits to start construction at its flagship Haile gold project, in South Carolina, Romarco, in December, reported that it had updated the project’s economics, resulting in a 72% boost in the project’s after-tax net present value (NPV).
The updated report was based on the company’s February 2011 feasibility study but, given the passage of time from the original economic analysis, the company undertook confirmatory work on the project economics.
Using a 5% discount rate, the after-tax NPV rose from $191-million to $329-million and the internal rate of return increased from 15.7% to 20.1%.
While most economic metrics remained constant, the assumed gold price was adjusted higher to $1 250/oz, from $950/oz.
The initial cost of the project rose to $333-million, including a $17-million contingency, of which $31-million had already been paid. This was higher than the initial capital estimate of $275-million, including a $30-million contingency.