www.mutinygold.com.au
Mutiny Gold (ASX: MYG) is a diversified resource company focused on the exploration and development of the company's gold, copper and nickel tenements in Western Australia.
Mutiny’s main focus is the Deflector gold copper deposit which is located within the Gullewa project where gold production is forecast from 2012.
Mutiny Gold nails project financing from Credit Suisse for Deflector Gold Copper Project
Mutiny Gold (ASX: MYG) has moved another step closer to development of the Deflector gold copper deposit, by securing a project loan and hedging facility agreement with Credit Suisse.
The facility will indicatively comprise an A$11 million initial project loan facility, along with a 50,000 gold ounce hedging facility - which effectively de-risks Mutiny's gold price exposure.
Mutiny is now fully funded to make the final A$4 million cash payment to move to 100% ownership of Deflector, and also complete the Definitive Feasibility Study at the project - forecast for delivery in March 2012.
Mutiny recently resolved to expand the scope of the Feasibility Studies to incorporate a re-assessment of Deflector, which is now expected to support production in the order of 100,000 to 120,000 gold ounces annually when fully ramped up.
The reason for the expanded study is due to 2011 exploration programs uncovering high grade intercepts at multiple locations, which predicate likely extensions to the planned open pit.
Another plus for shareholders in the deal with Credit Suisse is the minimising of share dilution.
John Greeve, managing director of Mutiny, said, “the agreement with Credit Suisse represents the mezzanine funding as advised to shareholders in May 2011 and follows the successful $A11.3 million capital raising completed on 9 September 2011.”
Details of the deal
Greeve added, “The board believes shareholders should be very positively reassured by this achievement following an extensive review by a leading international bank which specialises in gold project financing.
Upon completion of the Definitive Feasibility Study Credit Suisse has first right of refusal to provide the full project finance facility, subject to Hartley’s’ right to act as lead broker, for the underwriting of future capital raisings.
Drawdown of the loan facility and gold hedging facility is subject to a number of standard conditions precedent which are expected to be completed in the next few days.
Noah’s Rule Pty Ltd continues to advise the company on the appropriate financing strategies for the development of Deflector.
The attainment of the finance arrangement comes after an extensive review by Credit Suisse of the Deflector mine proposal and geology records.
Deflector - Feasibility Study
Mutiny is continuing work on a Feasibility Study, with the company having engaged GR Engineering Services to head up the mechanical engineering and plant design works.
Xstract Group is conducting the mine studies and Mutiny’s in-house project manager and metallurgist, Kevin Reynolds is managing the process as well as overseeing the metallurgical test work.
Earlier in 2011 Mutiny delivered a bumper Scoping Study, which included an IRR of 83%, a NPV of $187 million – which is likely to increase significantly, and cash costs over a ten year life of mine of just A$524 an ounce.
Deflector - by the numbers
Deflector currently hosts a resource of Measured 130,000 gold ounces and 12,000 tonnes of copper, and Indicated 105,000 gold ounces and 4,500 tonnes of copper.
The deposit contains a total resource of; 3.4 million tonnes at 5.4 grams per tonne (g/t) gold, 4.7g/t silver and 0.8% copper for 590,000 gold ounces, 510,000 silver ounces and 25,500 tonnes of copper.
Mutiny has an exploration target of between 1.65 million to 2.5 million gold ounces.
