Minerals explorer Havilah Resources NL has signed a deal with a Broken Hill-based contractor to finance and operate its Portia gold project in South Australia.
The company announced today that under the agreement with Consolidated Mining & Civil (CMC), development and mining of Portia – 120km north-west of Broken Hill – would be on a shared-risk, shared-revenue basis, with no further capital-raising required.
It is expected that initial site works will begin later this month, with operations to start later in the year and the first gold ore to be delivered to the processing plant by June 2016. CMC will be responsible for delivering the gold ore to the surface stockpile, while Havilah’s wholly owned subsidiary, Benagerie Gold, will be responsible for processing the ore and producing gold ingots.
Havilah said in a statement that with the arrangements in place with CMC, and based on the current gold price and exchange rates, the gold mine should deliver “substantial returns” in 2016.
“Havilah is in effect sharing a portion of the gold revenue with the mining contractor, who will fund the cost of delivering the gold ore to surface for processing,” said managing director Dr Chris Giles.
“This allows the Portia gold project to proceed without Havilah taking on onerous conventional loan terms or a significant dilution of existing shareholders as a result of issuing additional equity.
“With the mining fully funded and Havilah responsible only for processing costs, shareholders can look forward to significant returns from gold sales in 2016, which will put Havilah in a good position to advance development of its other projects, including the much larger Kalkaroo copper-gold deposit.”
State Government approvals were completed in October last year for the Portia project, which Havilah Resources acquired in 2003. Havilah was formed in 1996 to explore for gold and other metals in South Australia.