PMI Gold Corp (CVE:PMV) (ASX:PVM) said Friday it has completed its C$35.0 million bought deal public offering.
The offering, completed through a syndicate of underwriters co-led by
Clarus Securities and RBC Capital Markets, consisted of 28.0 million
common shares at a price of C$1.25 each.
PMI said it plans to use the net proceeds of the offering to fund its
definitive feasibility study on its Obotan Gold project and for general
In January, PMI Gold unveiled what it called "outstanding" results
from its NI 43-101 compliant pre-feasibility study for its flagship
Obotan gold project in Ghana, West Africa.
The study, which was done by GR Engineering Services Limited,
outlined a post-tax net present value (NPV) of US$416.4 million,
assuming a gold price of US$1,300 per ounce, a five percent discount
rate and a contract mining scenario, the company said.
The internal rate of return (IRR) for the open pit design project was
calculated at 31 percent after tax, with a 2.9 year payback period from
the start of gold production.
Initial capital costs were estimated at US$183.5 million, excluding
pre-strip mining costs of just over $68 million, for a project with an
average annual gold production forecast of 205,600 ounces per year over
an initial 11.2 year mine life.
Life-of-mine production was projected at 2.1 million recovered ounces
of gold, at a cash cost of US$690.2 per ounce, including royalties of
seven percent, refining costs and pre-strip mining.
The production scenario assumes a hard rock carbon-in-leach (CIL)
plant capacity of 3.0 million tonnes of ore per year for 10 years, with
capacity of up to 3.84 million tonnes per year for soft oxides.
PMI Gold said the strong economics of the project provide a solid
base for the feasibility study that is already underway, and is targeted
for completion by the end of June this year, paving the way for a
development decision in the third quarter.