panterragold.com/site
PanTerra Gold (ASX: PGI), formally known as EnviroGold, is a near term gold producer at its Las Lagunas project in the Dominican Republic with construction scheduled for completion in December 2011. The project has an expected life of seven years at an annual production rate of 65,000 ounces of gold and 600,000 ounces of silver.
PanTerra Gold is also active in Ecuador with the advanced Azuay Gold Mining project and the San Gerardo Gold Mining prospect. At the Azuay project, construction is targeted to commence in mid 2012.
EnviroGold $2.1m placement to develop annual 100,000 gold ounce Azuay project
EnviroGold (ASX: EVG) is undertaking a small placement to fund the ongoing pre-development of the Azuay gold project, located in Ecuador.
EnviroGold will place 15 million shares at $0.14 to a small number of existing shareholders to raise $2.1 million.
The company has also received a commitment from Moonstar Investments Pty Ltd, a trustee company associated with EnviroGold's chairman Brian Johnson, that it will progressively convert 10 million listed options at $0.15 before the 31 December 2011 expiry date.
Azuay offers a substantial potential return for EnviroGold after the company elected to retain 100% of the project.
The planned expansion at the project in 2012-2013 covers four small scale underground mines within the San Gerardo lease to produce a total of 300,000 tonnes of ore annually.
On the basis of a Scoping Study, forecast production from 2014 to 2026 is 1,134,000 gold ounces, or around 96,000 ounces annually for 12 years.
Scoping Study outcomes from 100% EnviroGold
- Total Development Costs: US$87 million
- EnviroGold Equity: US$27 million
- Mining Target: 4.0 million tonnes
- Project Life: 12 years
- Annual Mining Rate (after 12 months ramp up): 300,000 tonnes
- Head grade: 11g/t gold
- Average Annual After Tax Profit (Project Life): US$41.6 million
- Average Annual Cash Flow (Project Life): US$44.6 million
- NPV Project (10% discount rate, USD AUD parity): US$180.3 million
Comment
EnviroGold's two major projects have an Net Present Value (NPV) in excess of $US350 million, yet a market cap. of just $A85 million. Even after factoring in risk and probabilities and the "blue sky" of the San Gerardo property, it makes current valuation look low.
With the appointment of Toronto-based Haywood Securities Inc. as sponsor of the company’s proposed dual listing on the Toronto Stock Exchange, this is likely to tap a wider base of investors in North America that will appreciate better the company's Latin American projects.
It will also likely act as a spur for Haywoods to take a line through similar, but higher valued North American emerging gold producers - acting as a catalyst for re-rating of the company.
