Photo by: Reuters
PERTH (miningweekly.com) – ASX-listed gold developer Papillon Resources on Thursday said that its merger with Canada’s B2Gold would not affect the construction schedule of its flagship Fekola project, in Mali.
In June, Papillon and B2Gold struck a A$670-million merger agreement, which would result in existing B2Gold shareholders owning 74% and Papillon shareholders owning about 26% of the combined company.
“The timing [of the transaction] is quite fortuitous, based on where we are with the engineering work at Fekola, and we haven’t lost momentum with the schedule,” Papillon MD and CEO Mark Connelly told delegates at the second day of the Paydirt Africa Downunder conference, in Perth.
“We are still planning to start construction towards the latter part of this year, and will have a full contingent of people on the ground in 2015.”
The project’s prefeasibility study had estimated that over an initial nine-year life-of-mine, Fekola would produce about 306 000 oz/y of gold, at an average operating cost of $580/oz. The capital cost at the project has been estimated at $292-million.
Papillon was currently completing a definitive feasibility study (DFS) for the Fekola project, which was scheduled for completion in the second half of 2014.
The DFS would be targeting a four-million-tonne-a-year base case operation, but Connelly pointed out that this could be increased to five-million tonnes a year.
Meanwhile, both sets of Papillon and B2Gold shareholders were expected to vote on the proposed merger this month, with the merger to be implemented by October.
“The shareholders of both companies have been pleased with the financial metrics of the merger,” Connelly added.