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Amarillo Gold ends 1Q with C$40.7M in cash to advance Posse gold project towards production

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Amarillo Gold Corporation (CVE:AGC) (OTCQB:AGCBF) (FRA:72A) ended its first quarter of 2021 with a healthy cash balance of C$40.7 million to help develop its Posse gold project in Brazil. 

Posse is a shovel-ready gold project that Amarillo expects to build within two years of breaking ground. The project is anticipated to produce 102,000 gold ounces per year in its first four years and have an average annual gold production of 84,000 ounces based on an initial 10-year mine life.

In a statement accompanying its 1Q results, Toronto-based Amarillo told investors that it is focused on finding the best construction financing option. 

READ: Amarillo Gold Corporation to drill up to 8,500 metres this year at its Posse Gold project in Brazil

The company said that while it had signed an exclusivity arrangement with an established financier, it decided to let the exclusivity to expire as it believed it could get more favourable terms elsewhere. Under the prior arrangement, Amarillo completed significant technical due diligence, received the License to Install, signed an agreement to build a power line, and begun detailed engineering, which Amarillo told investors had both advanced and de-risked the project. 

“Securing the balance of the construction financing for our Posse Gold Project is taking longer than we anticipated,” said Mike Mutchler, Amarillo’s CEO.

“However, we have considerably de-risked the project since completing the feasibility study, and with a robust cash position, we believe that we should explore all our options to make sure that our ultimate choice minimizes dilution and maximizes return for our shareholders.”

Amarillo said it is reconsidering the terms from the above-mentioned financier and currently has several interested parties, who have begun their due diligence processes. 

“While it’s difficult to predict how long this process will take, with $40.7 million in cash, the company has the flexibility to investigate all financing options, even while continuing to develop Posse,” Amarillo’s team said in a statement.

Notably, the company has made significant strides in pushing the project towards construction, from acquiring land to working on detailed engineering and purchasing a crushing plant, in addition to making strides to build a power line for the property.

The firm is currently in the midst of an 8,500-metre drill program at Posse to identify potentially economic gold deposits that could add to the existing resource of 32 million tonnes at 1.1 grams per ton gold for a total of 1.2 million ounces in the high-confidence measured and indicated category.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Story by ProactiveInvestors



Source: http://www.proactiveinvestors.com/companies/news/950747/amarillo-gold-ends-1q-with-c407m-in-cash-to-advance-posse-gold-project-towards-production-950747.html


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