Continental Gold Reports on 2017 Activities
Monday, March 12th, 2018
Continental Gold Inc. (TSX:CNL; OTCQX:CGOOF) (“Continental” or the “Company”) is pleased to report on 2017 activities at the Buriticá project.
“Major milestones were reached during 2017 on the advancement of our Buriticá Project”, commented Ari Sussman, CEO. “After receiving our environmental permit in late 2016, we secured $275 million of project debt financing with Red Kite, a strategic investment of $109 million from Newmont and initiated construction of the largest gold mine in Colombia. Underground development is advancing on three separate headings and earthworks in the Higabra Valley is moving rapidly towards first major concrete pour in the coming weeks. We are also excited to have resumed drilling at the Buriticá project after a multi-year hiatus and look forward to both improving the mineral resource estimate with definition and infill drilling and testing newly-generated brownfield and greenfield targets with a goal of identifying a new discovery in 2018.”
Cash, Liquidity and Working Capital Position
- As at December 31, 2017, the Company had $91.4 million in cash and cash equivalents, working capital of $68.8 million and undrawn credit (subject to previously disclosed conditions precedent) of $225 million.
- Awarded the engineering and procurement contract and construction management contract to M3 Engineering & Technology Corp. and Merit Consultants International Inc., respectively.
- Advanced detail engineering to over 65-percent completion.
- Procured all long-lead equipment and items required to advance detail engineering.
- Substantially completed construction of the access road, which was both open and capable of receiving shipments in the fourth quarter of 2017.
- Imported mine development equipment and began pre-production development ahead of schedule.
- Commenced major earthworks construction.
- Completed a second trial mining test stope, results of which indicated increases over the mineral resource block model estimates on tonnes, gold grade, silver grade, gold ounces and silver ounces of 27%, 17%, 26%, 49% and 62%, respectively (see Company release dated December 18, 2017).
- Published our second annual Sustainability Report, providing information on the Company’s safety, environmental, social and economic performance in 2016, as well as key issues identified by the Company and its stakeholders.
- Commenced a 25,000-metre drilling program as part of the 2017 exploration program, which included: infill drilling of current mineral resources to upgrade them into higher classification categories; step-out drilling to target high-grade extensions; and testing of multiple new targets with high-grade gold potential, including identified Broad Mineralized Zones (“BMZ”). The Phase I Expansion Program also included the drilling of targets identified from grassroots exploration conducted around the Buriticá project during the past two years.
- Secured a senior credit facility with RK Mine Finance Master Fund I Limited (“Red Kite”) for a total of US$275 million.
- Completed a private placement whereby Newmont Mining Corporation invested US$109 million in exchange for a 19.9% ownership in the Company and Red Kite invested US$25 million for a 4.6% ownership interest.
- Appointed James Gallagher, Christopher Sattler and Stephen Gottesfeld (Newmont nominee) to the Board of Directors.
The Company is focused on advancing its Buriticá Project on schedule for first gold pour anticipated in 2020 and delivering on exploration objectives. To achieve this goal, major milestones over the next 12 months include:
- Complete detail engineering and finalize major mill and infrastructure procurement;
- Be well advanced with both earthworks and concrete work;
- Commence plant equipment mechanical and piping installations;
- Begin required site infrastructure construction, including warehouse, mine rescue, change house, assay lab and ancillary buildings;
- Commence tailing storage facilities construction and aerial tramway installation to be used for delivering filtered tailing to the paste plant;
- Advance underground mine development initiatives, including Yaraguá and Veta Sur ramps, stope definition drilling, and sublevel development in initial production areas;
- Commence construction of the 32-km 110kV transmission line to provide power from the national grid; and
- Continue with (a) infill drilling into Broad Mineralized Zones (BMZ) and for increasing drill density to upgrade tonnes and ounces in the current mineral resource into higher confidence categories; (b) step-out drilling extensions to identify potential resource along strike and down dip; and (d) exploration drilling on newly-identified greenfield targets.