PanTerra Gold’s (ASX: PGI) Las Lagunas process plant in the Dominican Republic has been connected to the national power grid and commissioning of the plant has begun.
A life of project contract for power supply has been formalised with a major international power company with a recently commissioned liquefied natural gas-fired 1000 megawatt power station.
The supply price to the project is indexed to U.S. LNG prices which have been falling on recent years due to increasing gas production from shales in North America.
PanTerra is considering a hedging program that could fix power costs going forward, as they constitute around 40% of operating costs for the production of gold and silver at Las Lagunas.
Option Conversion
Earlier this month, PanTerra raised about A$3.7 million from the conversion of 24.5 million of its listed options at $0.15 each.
The funding will boost the company’s September quarter cash in the bank sum of $6.5 million, which is expected to increase even further in the June quarter of this year with cash flow from the Las Lagunas gold tailings project expected to begin in April 2012.
If a gold price of US$1500 per ounce is maintained through to the end of 2013, PanTerra expects to repay its $37.5 million project loan and generate more than $80 million of free cash during the same period. Project life will be around seven years.
Commissioning of the Las Lagunas process plant will take around 10 weeks to complete before gold and silver production can begin in April.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/24259/panterra-gold-begins-commissioning-of-las-lagunas-process-plant--24259.html
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