(Alliance News) - Katoro Gold PLC on Tuesday said progress is going well in its recently set-up tailings processing joint venture in South Africa.
In January, Katoro entered a 50-50 joint venture with Blyvoor Gold Operations Pty Ltd. The two want to process gold mine tailings from six tailings dams owned by Blyvoor.
The two are targeting an initial processing rate of 250,000 tonnes per month, ramping up to 500,000 tonnes within two years. At 500,000 tonnes, this would mean around 35,000 ounces of gold production a year for the joint venture.
On Tuesday, Katoro said commercial and technical development is going well. Progress on feasibility, plant design, and related test work has been "good", Katoro added.
Katoro will be providing a GBP790,000 loan to the joint venture, with GBP263,000 already advanced. The rest will be sent "in the near term".
The loan to the joint venture is being funded by a previously announced convertible loan note issued to clients of Katoro's broker SI Capital worth GBP397,000, with a further GBP400,000 through Sanderson Capital Partners Ltd.
Katoro's Executive Chair Louis Coetzee said: "The Katoro team have been very pleased with the progress being made at the project, co-ordinated by the joint venture management committee and led by the recently appointed joint venture manager, Graham Briggs.
"Pleasingly, the project is proceeding more rapidly than anticipated and the drawn down of the Sanderson convertible loan note will enable us to fund the ongoing work programme."
"The board of Katoro notes the strengthening gold price which further bolsters what we consider to be very robust project economics, as previously announced," Coetzee continued.
Gold was quoted at USD1,652.09 per ounce on Tuesday afternoon, with the precious metal rising as investors flee to safe-haven assets amid the spread of coronavirus.
Katoro shares were 14% higher on Tuesday afternoon in London at 2.92 pence each. Kibo Energy PLC, which holds nearly 55% of Katoro, was 2.4% lower in London at 0.49p and untraded in Johannesburg, last seen at ZAR9.00.
By George Collard; georgecollard@alliancenews.com
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