May 11 2015
Alloycorp Mining Inc. is pleased to provide an update to shareholders regarding development of the Avanti Kitsault Project, summarized below.
Update on Avanti Kitsault Development
As at the end of April, overall engineering and procurement for Avanti Kitsault was approximately 60% complete. Engineering services have also been transitioned to DRA Taggart ("DRA"), which has initiated a Front End Engineering Design Study ("FEED Study") aimed at confirming engineering and procurement work done to-date. The FEED Study will provide better definition of the overall project execution plan and update estimated capital and operating expenditures, while reducing risk for the Avanti Kitsault Project. Upon completion of the FEED Study, DRA will present proposed project execution alternatives to the Company, including a lump sum engineering model, a build own operate and transfer model or a variation of both. Until the FEED Study is completed, no further pre-construction activities are expected or required to be undertaken. In the meantime, overall site management will be transitioned to the Company's team.
Concurrent to work on the FEED Study, the Company is developing a revised estimate of initial construction capital, sustaining capital, metallurgical recoveries and operating costs for Avanti Kitsault based on advances in engineering, procurement and metallurgical test work. The revised estimate is expected to be completed in the second half of 2015, at which time the Company intends to file an updated NI 43-101 Technical Report.
Pre-construction activities at Avanti Kitsault are now complete. Rough grinding of the earthworks for the Project's camp and processing plant area have been substantially finished and restoration and upgrade of the Nass River Bridge, providing primary road access to site, is complete.
In April, the Avanti Kitsault project operations office was officially opened in Terrace, British Columbia. The office is part of the Company's long-term commitment to community engagement.
Update on Avanti Kitsault Financing
Pursuant to the debt financing mandate letter agreement announced July 29, 2014, credit commitments for US$225 million have been secured. The Company does not expect further credit commitments to be forthcoming until after completion of the engineering FEED Study, at which time the existing approvals will be submitted for re-confirmation.
The Company has received conditional equity investment commitments from Resource Capital Fund VI L.P. ("RCF") and its limited partners. The Company also continues to evaluate both equity and non-dilutive sources of financing to complete construction requirements, including off-take investment by a strategic partner, investment in the project, other private equity investments, silver stream monetization and a public offering. Discussions have occurred with a number of parties and are ongoing.
The completion of secured financing facilities and the equity investments are subject to conditions including ongoing due diligence, negotiation and execution of definitive documentation, negotiation of terms, regulatory approvals and other customary conditions.
Source: http://www.alloycorp.com//