http://www.miningweekly.com/article/mutiny-close-to-securing-proj...

http://www.miningweekly.com/article/mutiny-close-to-securing-project-financing-for-deflector-2012-04-18

PERTH (miningweekly.com) - Gold developer Mutiny Gold on Wednesday said that it would likely secure some A$70-million in project financing by mid-year to start operations at its 530 000 oz Deflector deposit, at the Gullewa project in Western Australia.

MD John Greeve told the Paydirt Gold conference, in Perth, that the company had key objectives to meet over the next three months, including the completion of the project financing, the completion of the definitive feasibility study, and upgrading Deflector’s resource for its first reserve estimate.

“While there is some existing infrastructure in place, including the 300 000 t/y mill, we do still require a ball mill, crusher, flotation circuit, upgraded power plant and additional accommodation for a further 150 employees as we will be manning up the transition to mining from mid year,” he said.

Greeve said that the plant would be upgraded to a 620 000 t/y capacity.

“The completion of the definitive feasibility study will obviously determine our final project financing commitments and structure,” Greeve said.

Mutiny has already has secured an A$11-million strategic financing facility with Credit Suisse and has hedged 50 000 oz of production at a price of $1 920/oz.

“The hedge has a further benefit as it drops our break-even point at Deflector to around $800 an ounce and that compares to the current sustained gold price of around $1650-$1,700 an ounce,” he said.

Meanwhile, Greeve noted that a key focus over coming months would be the continuing intensive drill programmes to extend resources at Deflector and nearby deposits ahead of mine start-up and within a broader strategy to evolve a gold target of up to 2.5-million ounces.

“The more recently completed drilling for which results are still awaited, was targeted to deliver resource growth at Deflector sufficient to underpin production growth to above 100 000 oz/y,” he said.

“We are very confident of the potential to increase that rate further with resource and reserve increases expected, given the project’s strike extensions and planned drilling at depth.”