TSG going for fresh gold with £39.1m funding package
Trans-Siberian Gold (TSG) has set itself a May deadline to raise £39.1m to enable it to start full-time work on the development of the Asacha gold mine in Kamchatka, Far East Russia.Trans-Siberian Gold (TSG) has set itself a May deadline to raise £39.1m to enable it to start full-time work on the development of the Asacha gold mine in Kamchatka, Far East Russia.
Over £57.3m is to be invested into the Asacha site, which TSG believes has the potential to yield more than £170m worth of gold and silver over the six and a half year mining period planned for the project.
TSG, headquartered in Cambridge, said every effort was being made to hit the May target so it could begin underground development in August.
Plant construction would start in September, plant commissioning in December 2007, with first gold production expected in early 2008.
The money, which will be raised through a combination of project finance and equity, will be added to the £12.6m already spent on the Asacha project whose total capital and pre-production costs have been estimated at £51.7m.
A further £6.9m of capital expenditure will be spent over the six and a half year life span of the site once mining begins.
The decision to proceed with the project follows an in-depth financial and technical review of the Asacha and Veduga projects, which was undertaken shortly after the appointment of Jonathan Best as TSG’s new chief executive last November.
TSG is now in ongoing talks with Standard Bank plc together with the European Bank for Reconstruction and Development on gathering project financing.
Meanwhile, Anglogold Ashanti Ltd, a 29.8 per cent shareholder in TSG, has agreed to participate in the funding to maintain its shareholding.
Gold production at Asacha is expected to be 30,000 ounces in 2008 and then some 100,000 oz per annum over the subsequent five years before tailing off towards the end of the current planned life of the operation.
On the basis of current resources with an average recovered grade of 15.1 grams/tonne and planned ore production of 200,000 tonnes a year, Asacha will have a mine life of around 6.5 years, producing some 608,000 ounces of gold and 1.1 million ounces of silver at an average total cash cost of $200 per ounce.