LONDON (Alliance News) - GoldBridges Global Resources PLC on Wednesday said it intends to use a haulage decline rather than sinking a shaft to progress development of its Sekisovskoye underground mine to cut capital expenditure against a backdrop of pressure on the price of gold.
In a statement, the gold mining, exploration and development company based in Kazakhstan said the decision will give it financing flexibility by cutting the capital expenditure required for the underground expansion.
"This is an extremely attractive project that will deliver a significant increase in low-cost gold production at Sekisovskoye. Given the current challenging gold price environment, we believe it makes economic sense to reduce our initial capex requirements for Sekisovskoye as much as possible, and accessing our significant underground reserves via a decline rather than a shaft solution achieves this," Chief Executive Aidar Assaubayev said in a statement.
The company said it is at an "advanced stage" of talks to obtain "suitable" financing for developing the underground mine.
GoldBridges said it has agreed a deal with African Resources Ltd to provide financing to cover capital requirements if necessary.
African Resources is an investment vehicle owned by the Assaubayev family. According to GoldBridges' annual report for 2014, the Assaubayev family owned 61.69% of the company. Kanat Assaubayev is the chairman of GoldBridges, and is the chief executive's father.
"The reduced capex profile provides us with enhanced financial flexibility to fund the decline, and we are focused on securing suitable funding for the project. Furthermore, the commitment of our key strategic shareholder to provide funding if necessary will not only allow the development to proceed, but also highlights our major shareholder's confidence in Sekisovskoye as our primary asset," Aidar Assaubayev said.
GoldBridges shares were up 12.5% at 2.25 pence on Wednesday morning in London.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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