Mutiny restructures metals purchase agreement
PERTH (miningweekly.com) – Junior gold developer Mutiny Gold has renegotiated its metal purchase agreement with Sandstorm Gold as the company looks to reduce start-up costs for its Deflector project, in Western Australia.
Mutiny said on Tuesday that the renegotiated metal purchase agreement was part of a restructuring of the proposed financing package to commercialise the Deflector copper/gold project.
Under the amended agreement, Sandstorm would decrease the size of its financing facility from $41-million to the $6-million already drawn down by Mutiny, in exchange for a reduced right to purchase 2.6% of the project’s gold, as opposed to a previous 15%.
Mutiny said on Tuesday that the company was finalising a study to reduce the start-up costs of Deflector, and was also in discussions with US-based funds that have expressed interest in providing financial support for the Deflector development.
The Deflector project currently has a 2.86-million-ton resource, grading 6.4 g/t gold for about 591 000 oz of contained gold, and 0.9% copper for 27 000 t of copper.
A definitive feasibility study (DFS) has indicated a A$223-million profit with an initial production rate of 65 000 oz of gold, with a forecast average operating cash cost of $618/oz and an initial mine life of seven-and-a half years. The DFS found that a capital investment of some A$91-million would be required for the plant and mine construction.
Sandstorm has meanwhile also expressed its interest in providing stream financing for the capital cost to expand Deflector’s annual production of 70 000 oz of gold equivalent to more than 100 000 oz of gold equivalent.
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