PERTH (miningweekly.com) – Gold miner Saracen Mineral Holdings on Thursday told shareholders that the all-in sustaining costs (AISC) of its Thunderbox mine, in Western Australia, would fall by nearly A$25/oz, following the repurchase of the Norilsk royalty.
The 1.5% net smelter royalty had been capped at A$17-million.
Under an agreement with the royalty owner, Saracen would issue eight-million fully paid ordinary shares along with $500 000 in cash.
Following the purchase of the royalty, the sole residual royalty applying to the Thunderbox project would be a standard state gold royalty of 2.5%.
“This deal is a prudent use of capital. It will be of significant benefit to Saracen shareholders because it removes an embedded cost from the Thunderbox business, further expanding the margins and boosting cash generation,” said Saracen MD Raleigh Finlayson.
The cancellation of the royalty would reduce the anticipated AISC at Thunderbox to around A$1 000/oz.
The A$65-million Thunderbox project would double Saracen’s production to 300 000 oz/y, and was slated to produce its first gold in June this year.
Edited by: Creamer Media Reporter
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