PERTH (miningweekly.com) – Tin developer Kasbah Resources announced on Tuesday it would raise A$3-million to advance its Achmmach mine, in Morocco, despite taking the decision not to hunt for project financing given the current low metal prices.

The company reported that it had received firm commitments from major shareholders for some 104.6-million new shares in the company, priced at 2.9c each.

“The strong support shown by our shareholders to this placement endorses our interim development strategy,” said Kasbah MD Wayne Bramwell.

“While the market equilibrium is being reset, Kasbah can now advance critical project related tasks to ensure Achmmach is development ready.”

A March enhanced definitive feasibility study (DFS) into the Achmmach mine reduced the expected preproduction capital costs by some 18%. The enhanced DFS estimated that the project would require a capital investment of $148-million, instead of the original $181-million, and would deliver a net present value of $171-million.

The Achmmach mine was expected to deliver about one-million tonnes a year of ore, to produce about 5 300 t/y of tin concentrate.

Bramwell noted that following the release of the enhanced DFS, the company received strong indicative offers of debt from several European banks and development agencies.

However, he added that the Kasbah board was cognisant that an anticipated strengthening of the tin price, which recently touched a six-year low, would likely result in additional and more competitive financing terms for the Achmmach project.

Along with a decision to defer mandating commercial debt, Kasbah’s board had also adopted an interim development strategy at Achmmach, which would see the company completing the predevelopment environmental and social requirements of its largest shareholder International Financial Corporation, as well as undertaking pre-engineering design for the power lines required to service Achmmach, continuing low-cost exploration in Morocco and pursuing other joint venture opportunities, and preserving the value of the Achmmach project during the commodity volatility.

The company would, in the meantime, also look at reducing costs through a range of initiatives, including a board restructure, a reduction in board fees, a reduction in management remuneration, a reduction in expatriate operations personnel, and the relocation of its corporate offices to lower-cost premises.