17th Sep 2014 09:24
LONDON (Alliance News) - Metals Exploration PLC Wednesday said its Runruno gold-molybdenum project in the Philippines is within budget but announced it will be delaying the commissioning of its processing plant.
Current expenditure for the construction of the gold recovery process plant, as at August 31, stood at USD118.2 million, out of a budget of USD182.8 million, the company said. Capital commitments of USD23.2 million have been made against work in progress and plant and equipment acquisition, it added.
Metals Exploration said it is confident it has sufficient financial resources to absorb any additional cost due to the delay. Drawing down of its debt facility has commenced, it said.
"The financing facility [Hongkong and Shanghai Banking Corp Ltd, part of HSBC Holdings PLC, and BNP Paribas] provide together with the shareholders' equity contributions sees the company sufficiently well-funded to bring Runruno into commercial production," Metals Exploration said.
The company announced in May it had completed an agreement for a USD83 million debt facility, comprising of USD70 million senior facility, USD5 million capitalised interest during construction, and an USD8 million overrun facility.
Planned commissioning of the processing plant is now expected in the second quarter of 2015 due to late delivery of final engineering drawings, Metals Exploration said in its statement Wednesday. The plant, which would lead to the first gold production, was originally expected to start in the first quarter of 2015.
"Unfortunately the late finalisation of detailed design by contracted design engineers will push back the commencement of the commissioning of the processing plant to the second quarter 2015," said the company.
The company has also suspended exploratory drilling while it focuses resources on the construction of the Runruro project.
"Although our exploration drilling activities have been temporarily suspended while the company's resources are focused on delivering the project, they will resume at the earliest opportunity to further test the highly potential Runruno FTAA for additional gold deposits and for the discovery of new copper mineralisation," said the company.
Metals Exploration's shares were down 14% to 7.00 pence per share Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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