EganStreet offered funding options as it moves to production
EganStreet Resources Ltd (ASX:EGA) has taken another important step towards the development of its flagship 100%-owned Rothsay Gold Project, having received an indicative non-binding funding proposal of up to $35 million for the project.
This is an important time for EGA as it targets first production by 2019.
Rothsay is 300 kilometres north-east of Perth in WA’s Midwest region, and it currently hosts high-grade Mineral Resources of 401,000 ounces at an average grade of 8.8 grams per tonne gold.
Based on a Definitive Feasibility Study released in July the project has a production target of 2.1 million tonnes mined and 1.4 million tonnes processed at 6.9 grams per tonne gold for 250,000 ounces of gold produced.
However, as recently as last week the company released further high-grade exploration results which point to the probability of a resource increase.
Importantly, high-grade assay results such as 2.5 metres at 22.6 grams per tonne gold and one metre at 129.2 grams per tonne gold have been identified from areas outside the current resource.
Management to move quickly with funding decision
In conjunction with its financial adviser, PCF Capital Group, EganStreet has received and completed an initial assessment of several indicative and non-binding offers, which have been received from a range of financing groups.
The non-binding offers provide for financing solutions ranging up to $35 million of conventional debt alternatives containing attractive commercial terms consistent with a project financing of this nature.
The company anticipates moving forward quickly with the formal appointment of a preferred financier to secure development funding for the Rothsay Project.
This is in keeping with management’s strategy of utilising the cash-flow generated by an initial mining operation at Rothsay to target extensions of the main deposit and explore the surrounding tenements, which include a 14 kilometre strike length of highly prospective and virtually unexplored territory.
Consequently, the sooner the plant is built and cash hits the coffers the more aggressive EGA can be with its exploration campaign.
EganStreet managing director Marc Ducler said the receipt of multiple indicative offers from a range of reputable project financiers reflected the robust nature of the Rothsay Project and marked another step toward project development.
Based on the indicative terms received, Ducler is confident of securing an attractive project funding package which will underpin the development of the project, ensuring EGA remains on track to join the ranks of gold producers in 2019.
Given its production outlook, potential funding support and exploration upside EGA appears to be punching well above its weight with a market capitalisation of $27 million.
This information is general financial product advice only and you should consider seeking professional advice before making any investment decision. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.
Short-term positions in small, early stage ASX companies,
with high potential and near term price catalysts.
Focusing on resource exploration, early-stage tech, and biotech.
Exceptional opportunities across a broad range of
early-stage growth sectors with strong management.
Seeking 1,000% plus returns across medium to long-term holds.
Longer-term positions in a variety of sectors.
Seeking strong management where traction is established and have entered into a growth phase.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.