Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed Southern Cross Goldfields was on track to produce the first silver at its newly acquired Manuka project, in New South Wales, by year-end.
Southern Cross on Thursday reported that it had completed the acquisition of the Manuka project, previously known as the Wonawinta silver project, from the now defunct Cobar Consolidated Resources.
The project, which has a resource of about 60-million ounces, was acquired for A$375 000.
The A$60-million project poured its first silver in 2012, but the orebody proved more complex than first thought, prompting Cobar to make adjustments to the processing plant, and which resulted in a A$28.5-million impairment for the company.
Southern Cross had previously said it would spend about A$2-million on plant upgrades to bring the project back to production by December.
Meanwhile, Southern Cross had also met the preconditions for accessing its A$60-million debt funding package provided by TrailStone Group. The first A$25-million drawdown was used to fund the Manuka acquisition and to replace A$5.8-million of existing bonds. It also funded the full repayment of the company’s A$5-million debt facility with RMB Australia Holdings.
“Southern Cross has emerged from this exercise in a much stronger financial position. We have funding in place and a clear pathway to develop our impressive suite of gold and silver projects,” said chairperson Jon Parker.
“Since acquiring Manuka, we’ve advanced our planning and development processes and are continuing to identify and assess potential opportunities to extract significant additional value.”
Production from the Manuka project was expected to support the development of the nearby Mt Boppy gold project, which would come on line in 2015.