PERTH (miningweekly.com) - ASX-listed Blackthorn Resources has upped the price tag on its Perkoa joint venture (JV) to some $260-million, following a revised cost estimate by partner Glencore.
Glencore had previously agreed to provide $120-million working capital to fund the expanded project construction and commissioning through a combination of project equity and project loans.
Additionally, the international mining house has also agreed to source a $20-million working capital facility, bringing its total financing package to $140-million.
However, Glencore recently provided Blackthorn with a revised estimate of the costs up to completion, stating that it would now provide up to $180-million for the project.
This included costs relating to project construction, capacity expansion, underground and opencut development, and the addition of a lead and silver circuit, as well as the cost of a build-up in working capital to the completion of commissioning.
Blackthorn said on Tuesday that, in addition to the increased costs to completion, the company would also require further short-term funding during the first production year, to cover revised capital and working capital estimates, which were not yet finalised.
The JV partners were currently collaborating on a budget optimisation for the project, with the aim of minimising future short-term working capital requirements.
It was expected that the final budget would be agreed on during February.
The two partners were also in discussions regarding future funding alternatives.
Perkoa’s commissioning was now expected to be finalised by the end of February, with the first export vessel expected to set sail by the second quarter of the calendar year.
In the first year of operation, the feed to the plant was expected to be predominantly lead and silver ore from the openpit, supplemented by underground zinc ore production.
During the second year of operation, this would change to around a 50:50 ratio of lead and silver ore versus zinc ore.
From year three onwards, the majority of the feed would be zinc ore, with some silver and lead from the underground operation.
The project had a mineral resource of 12.17-million tons, at 10.3% zinc and 53.9 g/t silver. Measured and indicated resources stood at 7.15-million tons, at 11% zinc and 53.8 g/t silver.