Dec 9 2013
Colossus Minerals Inc. (the "Company" or "Colossus") provides an update on the status of the Company's efforts to identify and secure funding for the balance of the expenses identified to commence production at its 75% owned Serra Pelada gold-platinum-palladium Mine. The Serra Pelada Mine is a joint venture between Colossus and Cooperativa de Mineração dos Garimpeiros de Serra Pelada ("COOMIGASP") located in the State of Pará, Brazil.
In a press release dated November 14, 2013, the Company indicated that delays related to dewatering had resulted in a delay in production until the second quarter of 2014. The delay in reaching initial production meant that additional financing would be required.
Following November 14, 2013, the Company prepared a revised forecast of the capital and operating expenditures required to get to initial production with the funds required to meet certain existing obligations of the Company and estimated that it would be necessary to raise approximately US$70 million. Since then the Company has consulted with key stakeholders to discuss potential sources and structures for financing the US$70 million as well as additional funding that is expected to be needed between commencement of production and positive cash flow from operations. After lengthy discussions it was agreed that, at this time, a different approach is required.
Accordingly, the board of directors has taken a decision that the Company's strategy should be reviewed. To achieve that purpose, the Company will take the following steps:
- Cease underground development for the time being and focus on de-risking the project:
- completing the dewatering and undertaking additional underground drilling; and
- decreasing overall costs.
- Complete the NI 43-101 compliant resource estimate with Roscoe Postle Associates Inc. by the end of December.
As previously disclosed, the Company will need additional capital to carry on its business activities. These circumstances indicate a material uncertainty which may cast significant doubt as to the ability of the Company to continue as a going concern. The Company, in conjunction with its key stakeholders, is continuing its efforts to raise short-term capital to partly address its working capital deficiency and pursue other strategic alternatives.
About Colossus:
Colossus is a development-stage mining company focused on bringing its 75% owned Serra Pelada gold-platinum-palladium Mine into production. The Serra Pelada Mine is a joint venture between Colossus and COOMIGASP located in the State of Pará, Brazil. Serra Pelada, located in the mineral prolific Carajas region in the State of Pará, is host to one of the highest grade gold and platinum group metals deposits in the world. Between 1980 and 1986 Serra Pelada was host to the largest precious metals rush in Latin American history. Colossus Minerals Common Shares, warrants and notes trade on the Toronto Stock Exchange (TSX) under the symbols CSI, CSI.WT.A, CSI.WT.B and CSI.NT respectively and in the United States its Common Shares trade on the OTCQX under the symbol COLUF. The Company is headquartered in Toronto, Canada.
Qualified Person:
David Anthony, P. Eng., President and Chief Operating Officer of Colossus, is a "qualified person" as such term is defined in NI 43-101 and has reviewed and approved the scientific and technical information included in this press release.
Source: http://www.colossusminerals.com/