Source: The Gold Report 03/30/2017
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The release of the bankable feasibility study for the JV Montagne d’Or gold project in French Guiana, with Columbus Gold in partnership with Nordgold, has experts speculating on buyout prospects.
A bankable feasibility study on Montagne d’Or was released on March 20. Nordgold needed to deliver the study in order to earn in a 55.01% share of the project. Columbus Gold Corp. (CGT:TSX; CBGDF:OTCQX) maintains a 44.99% share. Sector experts immediately began discussing buyout scenarios.
Analyst Michael Curran of Beacon Securities outlined the study, noting, “as part of its earn-in of the project, Nordgold SE (not covered, now private) delivered a bankable feasibility study (BFS) on a 2.75 MMoz open pit reserve, to take its interest to 55.01% (CGT –44.99%). The BFS outlines a 12,500tpd open pit mine capable of producing 237Koz/yr over the first 10 years of a 12-year mine life. Initial capital to build the mine is forecast to be US$361MM (net of tax credit refunds), well below our US$450MM estimate. AISC of US$749/oz (Yr1-10) is better than our US$786/oz estimate.”
He also asked if this study opens the M&A Window. “With the BFS completed, and Nordgold’s ownership solidified, we expect Nordgold to review its commitment to project development. We maintain our view that Montagne d’Or would likely be better served with “one master,” thus expect either Nordgold to look to acquire CGT’s minority interest and build the mine itself, or for the partners to solicit interest in selling 100% of the asset to a third party,” opined Curran.
“We view Columbus Gold as an attractive speculative play for development success in French Guiana, with investors receiving exploration success potential in Nevada for free,” …read more