Havilah Resources Ltd (ASX:HAV) has earned first revenues from the sale of 300 ounces of gold from the Portia gold project to a long term shareholder ahead of first gold production.
The gold price for the sale was struck at A$1,691 per ounce free of costs resulting in $0.5 million in forward revenue received by Havilah.
The unrefined gold, with individual masses with a diameter of more than 1 centimetre will be delivered by agreement with the purchaser.
The obligation will be satisfied from run of mine gold production if no plus 1 centimetre masses are available.
This prepayment for future gold delivery is secured by the contingent obligation to issue 1.6 million Havilah shares (at a fixed price of 32.25 cents).
Dr Chris Giles, managing director, commented:
"Portia is a unique deposit and there is potential for some nuggets to be mined, although the size and quantity will only become clear once processing of ore commences.
"We have concluded this transaction with a long time shareholder who has demonstrated his faith in the project by entering into this gold sale in advance of first gold production.
"The price received of A$1,691 per ounce supplements the 10,000 ounces of gold already hedged at A$1,618."
Portia Gold Project
Portia provides a low-cost low-risk, entry point into production, with commencement in July/August 2016 using a simple gravity recovery operation.
On forecast production levels, this could generate $28 million in free-cash for over a six-month period.
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