http://www.proactiveinvestors.com.au/companies/news/12016/alcyone-resources-to-raise-a54m-for-silver-production-at-texas-fully-underwritten-12016.html
Alcyone Resources to raise A$5.4m for silver production at Texas, fully underwritten
Thursday, November 25, 2010
An economic review of Texas indicated that the project is well placed to generate strong operating margins based on a forecast annual ore processing rate of 1 million tonnes from the Twin Hills resource.
The economic model for Alcyone forecasts an average head grade of approximately 80g/t silver based on the current JORC mineral resource of; 3.8Mt at 83g/t silver for 10.2 million ounces of contained silver, and assumes an average recovery of 69%.
Alcyone said this is considered to be conservative based on the extensive metallurgical testwork undertaken by the company.
Alcyone Resources (ASX: AYN) will raise A$5.4 million through a 1-for-5 underwritten non-renounceable pro-rata entitlement offer at $0.035, with the proceeds for full-scale commercial production, and to fund other pre-development activities, at the Twin Hills Project, part of its 100%-owned Texas Silver and Polymetallic Project in south-east Queensland.
The entitlement offer will be fully underwritten by Cygnet Capital and sub-underwritten to $2 million by Charles Morgan, the companys chairman.
Alcyone has completed key aspects of its economic review as part of a wide-scale re-evaluation of the Twin Hills Mine initiated following the acquisition of the project from former owner, Macmin Silver, in November 2009.
At this production rate, the operation would generate annual production of between 1.5 and 2 million silver ounces, and would have a forecast unit cash operating cost of A$13.50 per ounce.
At current silver prices of A$27 an ounce, this would translate into a potentially robust operating margin of A$13 an ounce, enabling the project to generate strong cash flows.
The total plant capital estimate for re-commissioning the Twin Hills Project is approximately $13 million, comprising around $10 million for the process plant upgrade, $2 million for inventory, spares, first fill and commissioning and $1 million for remedial works.
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Cygnet capital are underwriting this entitlement offer. They know what the sp is worth.
Newminer.
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