Aurum funds Kyrgyz gold project
Article Date: Feb 26 2007Gold hopeful Aurum Mining has raised £30 million at £1 per share to build an open-pit mine in Kyrgystan.
AIM-quoted Aurum, whose directors include entrepreneurial shellmeister Haresh Kanabar, has raised a sum more than twice its present market value and representing 71 per cent of its enlarged capital to take the Andash Zone 1 gold and copper project into production. Institutions have subscribed to the placing, handled by the company’s broker and nominated adviser Arbuthnot Securities, priced at a discount to Friday’s 117.5p price.
Aurum’s chief executive Mark Jones said: ‘This placing will fully fund the construction and commissioning of the Andash Zone 1 mine and...should take the company through to positive cash flows.’ Aurum states there will be ‘no requirement for debt or associated hedging’ to start commercial production ‘during 2008’ at the mine.
He cites an independent bankable feasibility study by consultant Wardell Armstrong, which envisages payback on the project in 3.5 years. The study says Andash Zone 1 could hold a potential resource of 1.1 million ounces of gold equivalent and produce for 8.5 years at an operating cost – excluding capital expenditure – of $223 an ounce, compared with today’s price of $687.5 an ounce.
Aurum suggests there will be enough left over after allocating spending on Andash Zone 1 to support exploration elsewhere in the Andash licence area. Floated three years ago at 47p, Aurum shares topped 150p at one point before falling back to 30.5p early last year.
They are now 115p, down 2p this morning, valuing the company at £14.4 million. There could still be more to go for.
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