ASX-listed Calidus Resources has received firm commitments from institutional, sophisticated and professional investors for the placement of about 143.6-million new fully paid ordinary shares at an issue price of A$0.115 to raise about A$16.5-million.

Proceeds from the placement will be used to repay debt and provide additional working capital.

Further, Calidus has reached an agreement with its supportive lender Macquarie Bank to restructure its hedging volume profile and debt repayments. The restructuring will allow for significant cash flow generation throughout the 2024 calendar year and aligns the Calidus hedging profile with its production profile as the company aims to achieve its three-year strategy to achieve production of 120 000 oz/y.

“This financial restructure will deliver a host of substantial benefits to Calidus, headlined by increased production and cash flow this year. This will, in turn, help us achieve our target of producing 120 000 oz/y within three years.

“We are at an inflection point at the Warrawoona gold project, with gold production rising significantly in recent weeks as we see the benefits of the completion of the Klondyke cut-back and initial Blue Bar ore,” Calidus MD Dave Reeves said on March 22.

He said that, when combined with reducing costs owing to completion of the cut-back, lower deliveries into the hedge, lower debt repayments and record gold prices, Calidus was now able to generate significant cash flows.

“The funds from the capital raising, combined with the restructuring of the hedging profile and debt repayments, will enable new deposits such as Bulletin to be funded, as we methodically progress towards our aim to achieve 120 000 oz/y in three years,” Reeves said.

In addition to the placement, Calidus intends on undertaking a share purchase plan (SPP) at the same price as the placement, to raise up to A$3-million.

RESTRUCTURING

Under the terms of the restructure agreement with Macquarie, a total of 21 250 oz will be rolled into 2025 (11 250 oz) and 2026 (10 000 oz).

In addition, debt repayments of A$11-million have been rescheduled with final loan repayments extended by one quarter to September 2025.

In combination, the restructured debt and hedge profile result in about a $31-million reduction in cash outflows in the 2024 calendar year and ensures robust cash generation over the next 12 months, providing a runway to develop the Bulletin deposit and explore loan restructuring options.

Calidus has been in discussions with third parties since February and has engaged a financial adviser in connection with further potential refinancing options, including bond financing.

OPERATIONAL UPDATE

Calidus further reported on March 22 that it had achieved its best weekly operational performance to date from March 11 to 17, when the company recovered 1 526 oz of gold.

This gold, along with all the remaining gold sold not sold in March, will be sold at spot prices under the recent hedge restructuring. The company expects this to significantly boost cash inflows.

The improved performance was a result of higher-grade ore being accessed again in Klondyke, which is a direct consequence of the bulk of the cutback now being complete. Ore deliveries have begun from the high-grade Blue Bar satellite pit, which is expected to add significantly to gold production in the coming quarter.

In addition, total bank cubic metre (BCM) movement will drop by about 100 000 BCM a month from April, resulting in significant reduction to monthly mining costs as a result of the completion of the cutback in Klondyke.

Calidus said it remains on track to reach guidance for the second half of the 2024 financial year of 32 000 oz to 37 000 oz of gold produced.