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REGIONAL ROUNDUP

Big River flows into funding mode

ig River Gold Ltd’s remarkable turna- this stage in the [development]
Bround will be complete if it can lock cycle. The good news now is
away development funding for the 2.43 we’ve got a lot of interest from
moz Borborema gold project in north-east various sources both inside and
Brazil over the coming months. outside Brazil and we compare
The company (then known as Crusader very favourably with a lot of oth-
Resources) was in dire financial trouble 12 er projects of our type.
months ago and appeared destined for the “We’ve got good people in
scrapheap until major shareholder Ste- place and the gold price is going
phen Copulos sensationally returned as in the right direction, so a lot of
chairman in a last-ditch effort to save the things are going our way. Com-
business from an embarrassing collapse. pared to last year, where if we
Copulos enticed long-time associate didn’t get the money we would
Andrew Richards to join him on the rescue have gone under, things are
mission and together the pair raised the very different now.”
funds required to put the company back on Veteran finance expert John
a sound financial footing before embark- Cathcart and seasoned ge-
ing on a revised development strategy for ologist Beau Nicholls have also
Borborema. joined the company’s new-
Fast-forward to December 20 last year – look board, which is confident
just one day after publishing a robust DFS of landing project finance for
on Borborema – Big River announced Borborema by the end of Q2
Copulos was retiring and Richards had and beginning construction of
been promoted to executive chairman as the proposed 2 mtpa operation
part of a corporate reshuffle to prepare soon after.
the company for the next phase of its life, The DFS indicated almost
namely securing project finance and en- $US100 million is needed to
tering production “as soon as possible”. develop a standalone mining
Speaking to Paydirt last month from operation producing an average
Brazil where he was meeting with prospec- 71,000 ozpa gold for at least 10 Construction of a 2 mtpa operation at Borborema
tive local financiers, Richards marvelled at years. Output is expected to av- could begin in Q3 2020
the contrasting positions of the company erage 88,000 ozpa at C1 costs
from one year to the next. of $US622/oz for the first four ing about it and waiting for the numbers,
“It’s chalk and cheese,” he said. “Instead years of production. we’re in a position where we have the
of struggling to find where our next dollar Post-tax NPV and IRR are $US285 mil- hard numbers in front of us and we can
was going to come from, we’re now in a lion and 52.5% respectively when a higher start getting serious about indicative term
very comfortable position. $US1,600 gold price is assumed. sheets.”
“We’ll probably have to raise a bit of eq- “The results were in line with our internal While project financing takes centre
uity in conjunction with the financing, but expectations, but in saying that we were stage over the next five months or so, Big
that’s pretty normal for any company at still pleasantly surprised with the [capex] River will quietly chip away at optimisation
number that came out work in a bid to reduce costs and potential-
at the end; we didn’t ly the timeline to first production. Recruit-
Borborema DFS think it would be as ment of a dedicated construction team in
low as it was, but we’ll Brazil is also on the agenda.
Resource: 2.43 moz @ 1.1 g/t gold take it,” Richards said. Richards also plans to spend some time
Reserve: 784,480oz @ 1.22 g/t gold “Since the DFS reminding investors of the inherent value in
LOM production: 729,374oz came out, we’ve had a Brazilian gold projects.
Processing: 2 mtpa significant number of “There are many gold mines over here
Mine life: 10.2 years people who have con- at the moment, it’s just Australians don’t
Recovery: 92.5% tacted us. We com- know about it or have forgotten,” he said.
Capex: $US99.33 million pare pretty well, both Richards has also replaced Stephen
NPV (pre-tax): $US218 million in terms of production Copulos as non-executive chairman of
Consolidated Zinc Ltd. Richards was a
and also costs, to oth-
IRR (pre-tax): 43.6% er mines in the district long-standing executive director of the
Payback: 2.4 years and that’s been indi- Mexico-focused company and played a
C1 costs: $US642/oz cated to us by a num- key role in putting the Plomosas zinc pro-
AISC: $US839/oz ber of the banks we’re ject into production in September 2018.
LOM revenue: $US1.021 billion speaking to over here.
EBITDA: $US527.3 million “We’re into that – Michael Washbourne
*Based on $US1,400/oz gold price nitty-gritty phase now
where instead of talk-

Page 70 FeBRUaRY 2020 aUSTRaLIa’S PaYDIRT