Sihayo seeks to raise $4.50m through non-renounceable entitlement offer
Thursday, June 9 2016 - 06:12 AM WIB
ASX-listed Sihayo Gold Limited said Thursday it is seeking to raise up to approximately A$4.50 million (before costs) through a pro rata non-renounceable entitlements offer of two fully paid ordinary shares in the capital of the company (shares) for every five shares held by eligible shareholders on the record date at an issue price of $0.01 per share (entitlement offer).
The company said in a statement that there is no minimum subscription in respect of the entitlement offer.
The company previously announced ?initial? approval of the Government of Indonesia Feasibility Study (September 24, 2014) and receipt of approval from the Department of Environment (KLH) and Minister of Environment for the Analisis Mengenai Dampak Lingkungan Hidup/Environmental Impact Assessment (AMDAL) and Environment Permit (December 1. 2015).
The company said its priority remains to complete ?final? approval of the Feasibility Study and issuance of a Construction Permit and Forestry or ?Borrow and Use? (Pinjam Pakai) Permit from the Forestry Department.
?With the passage of time since the completion of the Feasibility Study in January 2014 and the recent improvement in the gold price the company believes there are a number of opportunities to optimize the project financial returns which warrant further investigation,? the statement said.
The company said it has also held preliminary discussions with a large EPCM company looking to expand its area of operations to include Indonesia. ?Whilst discussions are still at a very embryonic stage and there is no certainty of progression beyond this stage, this company has raised the possibility of providing a high proportion of the financing required to construct the project. Potential availability of such project financing is an additional incentive to re-evaluate and optimize the assumptions in the original Feasibility Study, especially providing the opportunity to increase the throughput of the mill and plant.? The re-evaluation/optimization work would focus on:
a) Power Supply
The company said discussions with the local and regional power supply regulator indicate progress is being made to increase the grid power generating capacity in North Sumatra. Some preliminary site investigation work is required into the potential sizing, location and layout of infrastructure that may be required to provide grid power to the project. If grid power were to become available, the overall power cost of the project may be materially reduced.
b) Metallurgical Recovery
The company said intends to undertake an investigation into alternative treatment strategies associated with near surface (regolith) ores and geo-metallurgy to understand opportunities to improve project economics.
c) Construction Capital and Consumables Prices
The company said it has been able to study the construction costs and operating costs of two other gold projects under construction and recently commissioned in Indonesia. ?The company would like to take the insights gained from studying these projects and apply them to the Sihayo/Sambung project,? it said.
There has also been a material and sustained reduction in the price of diesel fuel and other consumables since the completion of the Feasibility Study. ?The company would like to perform a detailed analysis of these lower prices to determine the overall impact on the Feasibility Study,? it said in the statement.
The company holds an interest in the Sihayo Pungkut Gold Project located in North Sumatra.
Editing by Reiner Simanjuntak