Los Filos in Mexico
Vancouver-headquartered Leagold has announced the proposed scheduling for the expansion of its Los Filos mine and for the construction of the Santa Luz project, as it arranged $400-million in financing.
Leagold’s development plan for the fully-funded Los Filos expansion, in Mexico, has been organised into three distinct projects with staggered start dates.
Mining at the Guadalupe section of the Bermejal openpit has been brought forward to the fourth quarter of this year, while the construction of the carbon-in-leach (CIL) plant has been deferred to the third quarter of next year.
The Bermejal underground development will resume in July.
“This phasing of the Los Filos expansion capital reduces construction and implementation risks while increasing our ability to use internal funding,” CEO Neil Woodyer said in a statement last week.
The capital cost to develop the Bermejal underground and to construct the new 4 000 t/d CIL plant would be $180-million, the company said, confirming the figure provided in the March 2019 feasibility study.
However, owing to the deferral of the CIL plant, the estimated life-of-mine production would be about 1.5% lower than the 3.2-million ounces over ten years estimated in the feasibility study.
Once the expansion is wrapped up from 2021, Los Filos will produce an average of 350 000 oz/y at an all-in sustaining cost of $694/oz and between 2021 and 2024, output will average 420 000 oz/y.
Leagold will turn its attention to the Santa Luz, in Brazil, when it has completed most elements of the Los Filos expansion and has pencilled in a project starting date for 2021.
Santa Luz is a previously operating openpit mine and a CIL plant, which was shut down in 2014. Leagold will use resin-in-leach at Santa Luz, rather than CIL, and is aiming for gold recoveries of 84%.
The cost to complete and restart Santa Luz is estimated at $82-million. The project has the potential to add more than 100 000 oz/y to Leagold’s production profile.
Leagold outlined its plans for Los Filos and Santa Luz as it secured a binding underwritten commitment from Société Générale, Investec Bank, and ING Capital for a $200-million term loan and a $200-million revolving credit facility (RCF).
The term loan and $150-million of the RCF would be available on closing and the remaining $50-million of the RCF would be available for the construction of Santa Luz.
Leagold said it would use the loan and a portion of the RCF to repay existing loan facilities of $238-million.
“We appreciate the strong support from our current lenders and newly formed underwriting syndicate and believe the combination of a 5.5-year amortising term loan and a 5.5-year bullet RCF will provide a strong, cost-effective and flexible structure to finance our growth,” commented Woodyer.