PERTH (miningweekly.com) – ASX-listed Calidus Resources has secured A$110-million in debt financing for the development of its Warrawoona gold project, in Western Australia, with plant construction now planned for the first quarter of 2021.
The company on Monday reported that it has executed a committed credit approved letter of offer from Macquarie Bank for the project loan facilities, following an extensive global tender and due diligence process.
The loan facility will have a 3.25-year tenor from the start of repayments in June 2022, and the facility could be repaid early at any time without restrictions or financial penalty.
A mandatory hedging of some 105 000 oz has been implemented, with deliveries spread over the tenor of the facility, with the hedging accounting for some 25% of forecast production over this period.
“This is a significant milestone for the project and the company and allows the company to commit to full development in the coming quarter,” said Calidus MD Dave Reeves.
“Macquarie have conducted extensive due diligence on Warrawoona and their agreement to provide the facility is a strong vote of confidence in the project and Calidus, and we look forward to working with the team at Macquarie on completing all documentation and conditions precedent to drawdown.”
Reeves noted that with the access road, water bores and telecommunications now complete, and the village install progressing on time and budget, Calidus is expected to conclude all major contracts and final operating permits to allow for main project construction to start in the coming quarter.
A feasibility study estimated that the project would produce an average of 90 000 oz/y over the first seven years, peaking at 105 000 oz/y in the fifth year of operation, with gold production to reach 658 000 oz over the eight-year mine life.
Life of mine all-in sustaining costs have been estimated at A$1 290/oz, while the project is expected to generate pre-tax cash flows of A$629-million and average annual earnings before interest, tax, depreciation and amortization of A$110-million.
The pre-tax net present value has been estimated at A$408-million, with the project’s internal rate of return estimated at 81%.