For companies operating in the former Soviet Union, good advice is precious. Recognizing this, Nelson Gold (TSE) has engaged International Finance Corporation to provide financial consulting services and government liaison for its Zeravshan gold project in Tajikistan.
IFC will advise Nelson on gold sales and distribution of cash flow, as well as arrange loan security and government contacts. Part of Nelson’s payment to IFC will take the form of an option to buy, at a fixed date, a million common shares of Nelson at a 20% premium over market value.
IFC will also have the right to invest in Zeravshan Gold Company, the joint venture of Nelson and the Tajik government, which will operate the project. This right can be exercised only when IFC has provided or arranged financing for the second (heap-leaching) phase of the project. All arrangements are subject to the approval of securities regulators and the Tajik government.
RTZ Consultants, providing production scheduling services for Nelson, have revised the proposed production levels for the three phases of the project.
As currently scheduled, Phase 1 (carbon-in-leach) will have average annual production of 84,000 oz. gold. Capital costs are estimated at US$33.4 million. Phase 2 will have annual production of 192,000 oz. and capital costs of US$62.1 million. Phase 3, during which time production from the underground mine will come on stream, will have annual production of 307,000 oz. and capital costs of US$39.7 million.
Production costs per ounce will start at US$112 and, over the 10-year life of the mine, average US$187.
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