JOHANNESBURG (miningweekly.com) – TSX- and Aim-listed Aureus Mining has entered into an agency agreement and a subscription agreement to collectively raise $15.3-million, excluding expenses, through the issue of 56-million new common shares.
The funds would be used to finance the $15-million implementation of an optimised mining plan for Liberia's first commercial gold mine, the New Liberty gold project.
GMP Securities Europe, Numis Securities and Edgecrest Capital Corporation agreed to find buyers for 26.7-million new common shares at 18p apiece, equating to about $7.3-million.
Aureus had also entered into a subscription agreement with the International Finance Corporation for a subscription of 29.2-million shares, raising around $8-million.
“The funds to be raised through the offering and the subscription will allow the company to push forward with the new optimised mining plan, which is more in line with the current gold price environment and achieves significant additional and accretive benefits to all our shareholders and stakeholders through earlier cash flow generation, a lower cost profile and improved operational efficiencies,” said Aureus president and CEO David Reading.
Any outstanding balance would be met by the company’s existing cash resources, which stood at $33-million in December.
The revised plan would see an additional 28 000 oz of gold produced in the first year of production through the mining of an additional starter pit to bring the total year-one production target to 122 000 oz of gold.
The new mine plan anticipated the operation’s life-of-mine (LoM) average operating cash costs of $692/oz to be 8% lower than previously expected, while all-in sustaining cash costs would be 7% lower than previously anticipated at $789/oz.
Mining operations had started, with the first blast of 25 000 t of waste rock successfully completed in January, with first gold expected by the end of May. Further plant optimisation and final commissioning was expected in June, with steady-state production to be achieved in July.
The first gold pour was initially expected in March; however, the outbreak of Ebola in the country had increased the difficulty of operating in the region and had hiked the operational costs.
“Despite the challenges posed by the Ebola outbreak, [which had directly and indirectly cost Aureus about $18-million], our construction and operations teams have worked tirelessly to continue the development of the New Liberty project,” Reading said.
“The new mine plan compensates for the delay and improves the project's economics. It reduces costs over the LoM and generates stronger cash flows, particularly during the ramp-up period and first six months of production, producing significantly increased free cash flow after debt servicing,” he noted.