Katoro chairperson Louis Coetzee
Aim-listed Katoro Gold has entered into a binding conditional agreement to participate in a strategic gold production opportunity in South Africa.
The opportunity involves the reprocessing of an existing 1.34-million-ounce gold tailings resource, together with Blyvoor Gold Operations and its holding company Target Mine Consulting.
The companies plan to exploit viable deposits of gold and other minerals from six gold tailings dams owned by Blyvoor in South Africa.
The project already has a mining licence and environmental-impact assessment (EIA) in place for the reprocessing of the tailings.
The companies plan to produce about 35 000 oz/y of gold over a 35-year mine life. The all-in sustaining costs are anticipated to be about $664/oz for the first five years of production.
Meanwhile, Katoro has raised a £397 000 convertible loan note with a number of clients of SI Capital, the company’s broker, to support its commitments under the agreement. Katoro is due to provide a R15-million, or £790 000 to the joint venture (JV).
Katoro has also put in place a facility with Sanderson Capital Partners, in which it may subscribe for up to £400 000 in the form of a convertible loan.
“Our initial objective is to rapidly secure the project level funding required to construct and commission the plant to reprocess the tailings in order to start generating revenues. I must emphasise that this is financing at the project level and does not represent dilution at the Katoro corporate level.
“In support of this, the necessary approvals are already in place, including a mining licence and EIA, meaning the JV is poised for immediate action as soon as the project funding has been secured,” said executive chairperson Louis Coetzee.