Higher prices prove positve for Cannon - Southern Gold
PERTH (miningweekly.com) – The value of ASX-listed junior Southern Gold’s Cannon project, in Western Australia, has increased by some 50%, the junior said on Monday, buoyed by the recent upturn in the Australian dollar gold price.
A feasibility study for the Cannon project estimated that about 20 000 oz of gold would be produced in the Phase 1 openpit operation, from a total mining inventory of 68 000 oz.
Southern Gold said on Monday that the feasibility study had been calculated at a A$1 400/oz gold price. However, under the forecast A$1 500/oz gold price, the Cannon gold project’s free surplus cash flow could increase by 50%, from the A$12.4-million estimated in the study to A$18.5-million.
In November, Southern Gold settled a finance and development agreement with fellow-listed Metals X, setting the Cannon project on the path to production in 2015. The agreement would see Metals X provide funding and manage the mining, haulage and ore treatment services at Cannon, through its own nearby Jubilee mill.
Southern Gold said that work completed in the last quarter of the year had underpinned significant progress of permitting the Cannon project in readiness to start mining in 2015.
Two key approvals have been granted to date, allowing Southern Gold to submit the mining proposal, closure plan and vegetation clearing permit. The receipt of government approval would enable Southern Gold to start initial development works, including infrastructure set-up, haulage road construction and other initial works by the end of March.
Prestripping and mining was planned for early April.
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