Osborne Park-based A1 Minerals says it is on track to becoming a gold producer later this year as it awards a $1.7 million plant refurbishment contract to CPC Engineering.
Osborne Park-based A1 Minerals says it is on track to becoming a gold producer later this year as it awards a $1.7 million plant refurbishment contract to CPC Engineering.
The Kalgoorlie-based CPC has already started refurbishing the Brightstar gold treatment plant with completion and commissioning expected by the end of October this year.
"Immediate construction of the plant was required to enable commencement of production before the cyclonic rainy period of November through to March," A1 said.
The plant will treat ore from the Brightstar gold project, located in the Laverton district in the eastern Goldfields region.
A1 recently raised $1.1 million from a share placement which enabled directors to undertake the financial liability of the CPC agreement.
Financing requirements for the project are estimated at $7 million, which A1 expects to fund through either debt and or equity.
The project has a mine life of 4 years starting from 2010 and is expected to produce 30,000 ounces of gold each year.
The announcement is below:
A1 Minerals confirms another step towards gold production by signing treatment plant construction contract
$1.7M Contract Awarded to CPC Engineering for plant refurbishment, construction and commissioning
Development Schedule on target for 2009 gold production
$1.1M Placement will total cash of $3.8M
Significant reduction in funding costs
The Directors of A1 Minerals are pleased to announce the signing of the contract for the refurbishment and construction of the BrightStar Gold Treatment Plant with CPC Engineering of Kalgoorlie, Western Australia.
The contract is for fixed price of $1.7M. CPC has already started refurbishment and the plant is scheduled to be completed and commissioned by 30th October 2009.
The placement announced recently for $1.1M has permitted the directors of A1 Minerals to undertake the financial liability of signing the agreement with CPC Engineering. The agreement allows A1 Minerals to take advantage of significant cost savings from the current availability of personnel and engineering services in Western Australia.
Immediate construction of the plant was required to enable commencement of production before the cyclonic rainy period of November through to March. The directors decided it was more cost effective to do a quick placement than halt the Brightstar development schedule while chasing funding at a possibly higher share price (which they viewed as problematic as a result of current volatility in capital markets.).
Although construction and mining approvals are not yet finalised, the company expects to be in production before the end of the year. The cost savings currently being experienced are having a positive impact on funding requirements. The rest of the financing required now estimated at $7M, is expected to come from debt and/or equity.
The Board is delighted the project is on schedule after announcing its first 150,000oz ore reserve just last month and the addition of the new discovery at Delta in February this year (725,000 oz resource for company total of 1.7M oz resource).
