9th Feb 2015 09:45
LONDON (Alliance News) - Aureus Mining Inc Monday said it has entered into an agency agreement and a subscription agreement which will raise a total of GBP10.1 million to fund a new mine plan at New Liberty project in Liberia.
Aureus also said the Ebola outbreak has delayed first production at the project by around 2 months, and said the disease has cost the company a total of USD18 million.
Aureus has entered into an agency agreement with GMP Securities Europe LLP, Numis Securities Ltd and Edgecrest Capital Corp. The three parties have agreed to purchase 26.8 million shares in the company at a price of 18.0 pence per share, raising around GBP4.8 million.
In addition, the company has entered into a subscription agreement with International Finance Corp, the private sector arm of the World Bank Group, which will see IMF subscribe to 29.2 million shares at the same price of 18.0 pence per share to raise around GBP5.3 million.
The funds will be used to fund a new mine plan at New Liberty in Liberia, which should allow for increased flexibility and generate stronger cash flows, particularly in the early years of the project's production phase, said Aureus.
The new mine plan for New Liberty is set to cost USD15 million, which will be funded by the agency and subscription agreements, and increase the project's cash flow and accelerate cash generation in the early stages of the project.
The new mine plan will produce an additional 28,000 ounces of gold in the first year of production through mining the starter put, bringing the company's production target in the first year to 122,000 ounces of gold.
The new plan will generate more cash than originally expected and fund the company's exploration programmes. Aureus said the new plan is more aligned to the current gold price environment and de-risks the project.
The new mine plan has also reduced the costs of the project, with cash costs expected to be around USD692 per ounces, 8% less than previously estimated whilst all in sustaining costs have fallen by 7% to USD789 per ounce.
In addition, the company said it has delayed the first gold pour from its operations in Liberia to the end of May from March due to the Ebola crisis. Aureus said although it had maintained construction activities throughout the outbreak, it has delayed the first gold pour as a result of logistical and other difficulties "beyond the company's control," it said.
The company said production is now scheduled for July 2015 and said the Ebola outbreak has cost the company an additional USD18 million to date.
"Despite the challenges posed by the Ebola outbreak, our construction and operations teams have worked tirelessly to continue the development of the New Liberty Project," said David Reading, president and chief executive of the company.
Aureus shares were down 8% to 19.55 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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