Thanks to gross proceeds of $20 million in "bought deal" financing Nevsun Resources (NSU-T) is one step closer to production at its Tabakoto gold project in Mali.Nevsun raised the money by issuing 8 million units at $2.50 per unit. Each unit consists of one share and one-half of a purchase warrant. Each full warrant has a three-year exercise-term and is exercisable at $3.25 per share.
The company has begun construction at Tabakota and plans to begin gold production by the end of this year.
The project has an estimated pre-production capital cost of US$40 million. A feasibility study completed in 2002, estimated Tabakoto had a proven and probable reserve of 3.4 million tonnes grading 5.26 grams gold per tonne, based on a gold price of US$350 per oz.
The planned mining rate is 650,000 tonnes of ore grading 5.45 grams gold per tonne annually for 5 years.
Cash operating costs are expected to be in the range of US$230 to US$250 per oz. gold.
The company’s adjacent Segala gold project, which has proven and probable reserves of 4 million tonnes grading 3 grams gold per tonne (or 381,000 contained oz.) may extend operations at Tabakota.
In addition a final feasibility study for Nevsun’s Bisha precious and base metal-rich volcanogenic massive sulphide deposit in Eritrea is underway and should be completed in the first quarter of 2006.
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