Pasofino Gold Ltd. [VEIN-TSXV, EFRGF, NO7A-FSE] said it has raised $3.1 million from a non-brokered private placement financing and will use the proceeds to advance the company’s Dugbe gold project in southern Liberia. It said the funds will be used to optimize the 2022 definitive feasibility study and further progress the project.
The private placement consisted of 6.29 million units priced at 50 cents. Each unit consisted of one common share and one half of a common share purchase warrant. Each warrant entitles the holder to purchase one common share for 65 cents for 18 months after the issue date of the units.
A total of 6.29 million shares and 3.14 million warrants were issued under the financing. All 6.29 million units were subscribed by insiders, the company said, adding that Hummingbird Resources [HUM-AX], which holds a 51% stake in Pasofino, and is a controlling shareholder, subscribed for 5.4 million units.
The 2,302 square-kilometre Dugbe gold project is situated within the southwest corner of the Birminian Supergroup, which is host to most of West Africa’s gold deposits. To date, two deposits have been identified at Dugbe. They are Dugbe F and Tuzon. Both were discovered by Hummingbird entities in 2009 and 2011 respectively.
Pasofino, via its wholly-owned subsidiary ARX Resources Ltd. owns 100% of the Dugbe Gold project (prior to the issuance of the Government of Liberia’s 10% interest).
Small-scale artisanal gold mining has occurred at many sites across the project area for an unknown length of time.
A June 2022, feasibility study estimates that 2.27 million ounces of gold can be produced over a mine life of 14 years. Average annual production is forecast at 200,000 ounces for the first five years. The estimates are based on a mineral reserve of 2.76 million ounces. An additional inferred resource of 67,000 ounces located within the FS pit and immediate sidewalls is not included in the reserve estimate.
Pre-production capital is pegged at US$397 million, excluding owners’ costs for a 5.0 million tonne per year processing plant. Life-of-mine all-in-sustaining costs are expected to be US$1,005 an ounce.
In a press release containing the results of the feasibility study, the company said the Dugbe Gold Project is now a significant, viable and economically robust gold project, with substantial upside potential to improve upon the already large 4.0-million-ounce resource base.
Life of mine metallurgical recovery for the study was set at 83%, leaving significant upside that the company said can be brough to account as the price of gold increases and capital expenditure cost associated with further process recovery steps reduces.
The company said both deposits extend beyond the mineral resource estimate pit shell and there is opportunity to expand the high grade zone at Tuzon beyond its current modelled extent.
On Friday, Pasofino shares were priced at 42 cents. The shares trade in a 52-week range of 75 cents and 30 cents.