JOHANNESBURG (miningweekly.com) – Mozambique-focused Auroch Minerals requires funding of $7-million for the next year to advance the Manica gold project’s Stage 1 definitive feasibility study (DFS) and initiate further exploration.

The ASX-listed company, which released an “investment opportunity memorandum” this week, invited expressions of interest to kick off further discussions for the funding,which would stretch until February 2015.

Auroch had secured a grant of R8-million – or 33% of the anticipated DFS cost – from South Africa’s Department of Trade and Industry (DTI) to advance the study.

“The funding provided by the DTI shows the support of the South African government and opens the possibility to obtain funding at the project level from South Africa, including the South African Export Credit Insurance Corporation (ECIC),” commented Auroch MD Dean Cunningham.

The company pointed out that the availability of ECIC cover enabled access to a “straightforward and tried and tested” route to obtain project funding.

“Aureus, in Liberia, recently [secured] similar style financing using ECIC and Auroch would look to replicate that,” Cunningham added.

The DTI grant would be paid directly to South Africa-based design, engineering, procurement and construction company Basil Read Matomo, which was undertaking the DFS on the Stage 1 project.

About 35% of the Stage 1 DFS had been completed to date and Auroch expected the remaining scope of work to be completed during the fourth quarter of 2014.

The proposed Stage 1 operation comprised a 30 000 t/m nonrefractory gold plant, which would create a “pathway to unlocking” a 2.82-million-ounce resource at Manica through stages 2 and 3.

“A key objective of the Stage 1 development strategy is to ensure a robust internal rate of return, a positive net present value and an environmentally and economically sustainable standalone project,” explained Cunningham.

The company also planned to use about $1.59-million of the funding to restructure a transaction agreement and buy back shares from its major shareholder Pan African Resources at A$0.088 a share, which represented a 17% discount on the current market price.

Another $1.3-million would be used for further exploration around the gold project.