TORONTO (miningweekly.com) – Gold miner Petaquilla Minerals has completed an early payout of the existing gold and silver prepayment agreements, as well as a convertible loan previously negotiated with Deutsche Bank, which as a result fully released all existing encumbrances on the company's assets.
Vancouver-based Petaquilla also on Tuesday said that it had reduced a significant portion of its short-term liabilities and reaffirmed its commitment to a policy of balance sheet strengthening by further pursuing opportunities to reduce its other current liabilities.
Petaquilla said that in Panama, where it operates the Molejon gold mine, it plans to ramp up gold output through plant and leaching operations to 4 000 oz/y, at an expected cash cost of $850/oz.
The company is aiming at becoming cash-flow positive in the second quarter of 2015.
Petaquilla stressed that it had enough reserves at its Molejon deposit to continue production at that rate for a further five years.
The company said that added to that, it had about 152 000 oz of gold slated for leaching, which were currently being stockpiled. A plan to reduce general and administrative costs and to align general compensation with the company's new goals would also be implemented with immediate effect, with further cost-cutting measures to be introduced at the beginning of the new financial year.
At the same time, Petaquilla is strategically positioning itself for growth and production in the Iberian Peninsula, focusing in the near-term on mineral resource expansion and developing its Iberian properties. The company is targeting production in Spain and Portugal in the early part of next year.
Petaquilla had recently reached an agreement to completely separate the Molejon mine from base metals miner First Quantum Minerals’ Cobre Panama copper/gold mine.
The companies with neighbouring projects signed an agreement earlier this month that would see Petaquilla transfer large swathes of land to First Quantum, among other things, for total payments of up to $60-million.
Petaquilla’s TSX-listed stock on Tuesday closed down 7.14% at C$0.13, having lost half its value since the start of the year.