AEX Gold makes "good progress" on Nalunaq property

Greenland-focussed gold company AEX Gold updated the market on the development of the Nalunaq property in south Greenland on Monday, reporting “good progress”.

The AIM-traded firm said “significant work” had been completed on key work streams at the fully-funded project since its successful AIM listing and fundraising in July.

It said the project remained on track, with workstreams progressing in line with management expectations.

The board said progress had been made in the contracting of key infrastructure and long lead items, with camp and ancillary system providers now contracted and the bidding processes for underground development and processing equipment said to be well progressed/

Conversations were ongoing with a number of potential working capital or vendor financing providers.

AEX said it was in receipt of a number of “attractive proposals”, and was in a number of further discussions, adding that it would consider all options available before moving forward.

Terms of reference for Nalunaq's environmental impact assessment and social impact assessment had been accepted by authorities in Greenland, and would shortly open to public consultation.

The company said the final assessments and closure plan, as well as a further public consultation, would begin in the first half of 2021.

AEX also reported continued progress in the assessment of flotation as an alternative to leaching for second-stage processing.

The board said flotation offered an “attractive option” with overall gold recovery rates of 91% to 97%, as well as the potential for significant cost savings, shorter time to implementation, and limited environmental risks.

Discussions with global smelters provided confidence in the marketability of the gold concentrate produced by flotation, the board asid, adding that the firm was now undergoing an advanced costing exercise.

“The commitments we have made already to the project around the camp facilities and the front-end engineering are crucial steps in securing the project timeline,” said chief executive officer Eldur Olafsson.

“On the process engineering front, our team and third-party experts are progressing well and are currently out for firm quotes on long lead process equipment, which will ultimately allow us to commit to the supply of key process components and continue optimizing the project's schedule.”

Additionally, Olafsson said the company had been able to add value to the project by demonstrating that a flotation circuit at Nalunaq was likely to be a “very attractive and a cost-effective solution” to produce a highly marketable gold-grade concentrate.

“We continue to work diligently as a team on all of the project workstreams as we look to bring Nalunaq into production and we look forward to providing further updates to the market in due course.”

At 0804 GMT, shares in AEX Gold were up 4.74% at 43.99p.