De Grey Mining (ASX
EG) is aiming to finalize the detailed terms of its massive $1 billion financing package for its Hemi gold mine project in WA’s Pilbara by the middle of this year, following further discussions with selected banks and government funding agencies during the three months to March 31.
The company, which owns the most prospective gold project in the country, spent much of the quarter shaping the mining project’s funding and refining the Definitive Feasibility Study (DFS), along with continuing drilling work at several prospects near the core Hemi areas.
De Grey indicates that the financiers have suggested the project could support up to $1.2 billion in funding.
In its March quarterly report, the company stated, "During the quarter, the Company continued its engagement with 10 short-listed banks and two Government Funding Agencies after receiving non-binding indicative offers (NBIOs) in the December quarter following completion of the Definitive Feasibility Study (DFS).
"Term sheets have been provided to the shortlisted banks, and Independent Technical Expert (ITE) reports have been provided to them, as they are now undertaking due diligence.
"The ITE reports involve a multidiscipline review of the entire Project as described in the DFS and have not highlighted areas of significant concern or of high risk."
De Grey mentioned that the lenders have presented "non-binding indicative offers that the Project can support a debt capacity ranging between $0.9 – $1.2 billion (excluding any cost over-run facility), with the majority indicating a debt capacity of approximately $1.0 billion.
De Grey remains on track to have Credit Approved Term Sheets by mid-year.
Simultaneously, the company continues to explore opportunities to improve the project and "has already identified several opportunities to enhance the DFS outcomes."
These opportunities include the potential to increase the scale of the Eagle and Diucon open pits, based on significant extensions identified in drilling completed after the cut-off date for the June 2023 resource estimate and DFS mine designs.
"During the quarter, the increase of 1Moz in the Hemi JORC Inferred Resource was principally due to significant depth and strike extensions at Eagle,” the company stated in the report.
The company is also closely examining the possible construction of a separate regional concentrator at Withnell, to treat regional deposits, with an initial target production rate of 150,000 ounces a year from the 1.7 million ounces in the Withnell prospect, plus potential resource extensions across the western regional land holdings.
"An options study was initiated during the quarter to evaluate the processing options, which is expected to be completed around mid-year 2024,” De Grey mentioned.
It also continues to explore the "potential for underground production concurrent with open pit production at Hemi, currently demonstrated at Diucon and Eagle, with potential from other Hemi deposits.”
"A conceptual study was conducted during the quarter along with underground mineralization modeling at Diucon."
Exploration during the quarter focused on extending resources at Hemi and the Western Hub, advancing prospects in the 40km Greater Hemi Corridor, and identifying new regional targets across the Project.
“Exploration success has continued to provide evidence of upside to the DFS production profile,” the company concluded.
