Canyon Resources trims debt

Colorado-based Canyon Resources (CAU-X) has unwound a hedge position in order to repay debt from the Briggs gold mine in southeastern California.

The company generated US$11 million in cash by repurchasing roughly 120,000 oz. gold it had previously sold forward. Of this, US$8.6 million was used to pay down US$25.9 million in project debt; the balance of the proceeds were placed in escrow.

Canyon now has US$17.3 million in gold loans, payable over 4.5 years at interest of 4%. The debt translates into 57,499 oz. gold at a prearranged spot price of US$301.50 per oz., though the company notes that this amount is covered by short-term put options valued at over US$400 per oz.

In 1997, the Briggs mine cranked out 66,769 oz. gold and 19,215 oz. silver at an average cash cost of US$290 per oz. gold. This year’s production is expected to exceed 90,000 oz. gold at a projected cash cost of US$250 per oz.

Minable reserves are estimated at 20.5 million tons grading 0.03 oz. per ton, based on a gold price of US$300 per oz.

Meanwhile, permitting and development of the McDonald gold project in Montana is continuing. Earlier this year, the company announced its intention to seek a joint-venture partner, as it was unable to raise the US$25 million needed to advance to a production decision.

The McDonald deposit hosts resources of 187 million tons grading 0.04 oz.

gold.

Print

Be the first to comment on "Canyon Resources trims debt"

Leave a comment

Your email address will not be published.


*


By continuing to browse you agree to our use of cookies. To learn more, click more information

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.

Close