Aureus Mining raises $72m to fund transition

Aureus Mining announced on Friday that it has conditionally raised approximately $72m via an equity fundraising to finance its transition to an owner-operator mining model, repay amounts due to Nedbank and FirstRand Bank, and to strengthen its balance sheet.

The AIM-traded firm said approximately $60m was being raised from MNG Gold Jersey through a direct subscription with the company at a price of 1.5p per share.

On top of that, around $12m was being raised from institutional investors, also at a price of 1.5p per share.

Aureus said the net proceeds of the fundraise will be used to effect the company's transition to an owner-operator mining model through the proposed acquisition by Bea Mountain Mining Corporation of mining equipment and inventory from Atmaca Services Liberia.

It will also be used to terminate the mining services contract, as set out in the company's announcement of 6 September.

The board estimated that the transition to an owner-operator mining model could result in cost savings for BMMC of approximately $1.5m to $2m per month.

Additionally, funds will be used to pay historic MonuRent Liberia invoices, to make principal and interest repayments due to lenders, to fund improvements to the processing plant and tailings storage facility, for regional exploration of existing licenses, and for general working capital requirements.

On the operational front, Aureus said performance at the New Liberty Gold Mine continues to improve with 6,021 ounces of gold produced in September 2016.

“Under its rescheduled production profile, the company is targeting production of approximately 100,000 ounces of gold in 2017 with life-of-mine cash costs of $743 per ounce and all-in-sustaining costs of $845 per ounce,” the board said in a statement.

“The directors believe the updated profile has scope for further optimisation and that there is the potential to review the pit shell and contained gold ounces once lower operating costs have been demonstrated.”

The company claimed to have made progress in addressing the issues that led to the historical failure to deliver the mine plan.

“These include improving the detoxification circuit, increasing the number of experienced operators on site, establishing more efficient procurement processes and plans to redesign the TSF.”