200k to £/$5 million5 Nov 2016 09:27
KRYSO RESOURCES PLC Chairman’s Statement
Operational Highlights
During the half year to June 2012, our Company has achieved a number of significant milestones in the development of the Pakrut Gold Project (the "Project"). These include the issue of the mining licence which is valid to 2030, JORC resource upgrade to over 5 million ounces of gold and post period end, the award of the underground mine construction contract.
Works have now commenced and completion is scheduled for March 2014, with production to commence immediately thereafter. This is therefore an incredibly exciting time as Kryso transitions from an exploration and development company into a gold producer.
Drilling Programme
We currently have five diamond drill rigs operating at the sites. We expect to release independently verified assay results in the near future.
Mine Construction
Following a competitive tender process, the Company recently awarded the contract for the construction of the underground mine to China No. 15 Metallurgical Construction Group Co., Ltd ("15th MCC"). The works to be undertaken by 15th MCC will comprise construction of the main ramp, mining area ramp, east air shaft, west air shaft, level and sublevel development works, chambers, ore pass, exploration works, mining and cutting works, installation of equipment for the mine, construction of a flood discharge tunnel for the tailings dam and ancillary works. The awarding of the other main construction contracts relating to power lines, processing facilities and the tailings dam will be announced by the Company shortly.
The Beijing General Research Institute of Mining & Metallurgy (“BGRIMM”) is currently completing the final version of the Bankable Feasibility Study ("BFS") for the Project. The results of the BFS will be released by the Company in the near future providing for increasing production capacity compared with the previous BFS and will update both the capital and operating expenditure requirements for the Pakrut Gold Project. Kryso envisage an initial processing capacity of 660,000 tons of ore per annum, increasing to 1,320,000 tons per annum from 2017.
Financial Highlights
Development work costs increased 266% to US$5,207,000 (1H2011: US$1,424,000) due to additional expatriate engineers being employed, depreciation on recently acquired equipment and consultants engaged to finalise the detailed engineering and design and securing the mining licence. These costs have been fully capitalised.
Administration expenses increased 4% to US$970,000 (1H2011: US$937,000).
The Company secured a US$93.5million project finance loan facility during the period, with the first drawdown on the facility expected to take place in the near future. The loss increased 100% to US$892,000 (1H2011: US$447,000) due to reduced profit on foreign exchange.
Outlook
The next 18 months will see the Company undertak