DOMINICAN REPUBLIC - Toronto-based GLOBESTAR MINING aims to secure debt and equity capital financing for its open-pit Cerro de Maimn copper-gold project in the Dominican Republic within the next three months, said company president Bill Fisher.
On May 17, Globestar published a revised feasibility report for the open pit project, which envisages processing 2.8 million tonnes of sulphide ore with grades of 3.4% Cu, 1.6% Zn, 36 g/t Ag and 1 g/t Au as well as a further 577,000 t of oxide ore with grades of 64.7 g/t Ag and 2.6 g/t Au. The report is based on metal prices of US$1.00/lb copper, US$375/oz gold, US$5.38/oz silver and US$0.40/lb zinc. Pre-production capital costs are estimated at US$28.3 million. The open pit feasibility study estimates an after-tax internal rate of return of 22%, a net present value of US$23 million at a 5% discount rate and an after-tax net asset value of US$37.5 million.
"We've got an information memorandum that's going around to the banks and when we get a sense of what the debt capacity of this project might be in the context of the market, then we'll know the equity portion [of debt and/or equity] we'll require," said Fisher.
All the necessary permits have been secured for the project, which will allow Globestar to begin construction as soon as the funding is secured. Construction is estimated to take 12-15 months and the company aims to begin commissioning the project some time in 2006.
Globestar believes it can bring the project into production on its own but is willing to consider seeking a partner if necessary.
"Obviously if you're an existing mining company, you'll probably get better terms than we would but at this point we're planning to go it alone," Fisher said. "If it turns out to be too onerous, we'll look for a partner but our plan right now is to mine it ourselves and become a mining company."
Globestar believes further mineralization potential exists in the underground portion at Cerro de Maimn and where the company has already calculated measured and indicated resources at two other deposits.
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