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MEI Online: Plant Operation News: Australasia: October 10th 2014


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:: Mutiny Signs MoU for Design and Construction of Deflector Gold-Copper Project in WA


Mutiny Gold is pleased to announce that it has entered into a Memorandum of Understanding (MoU) with GR Engineering Services in relation to the Engineering, Procurement and Construction (EPC) of a new processing facility for the Deflector gold-copper-silver project in WA.

This latest key milestone follows Mutiny's receipt of several indicative non-binding project finance offers and its resultant short-listing of a number of major Australian and global banks for the Deflector debt financing. In the next stage of the debt funding process the Company will assist the short-listed banks to conduct detailed due diligence ahead of them making formal and credit approved offers of finance.

The combination of the EPC MoU and the indicative offers of funding means Mutiny remains firmly on track to bring Deflector into production as a low-cost WA gold-copper miner.

The Deflector feasibility study found the project achieves robust economics. Deflector has a JORC-compliant reserve of 322,000oz of gold at a grade of 5.6gpt with a further 16,000 tonnes of copper and 360,000oz of silver.

Based on the Life of Mine Inventory, the project is forecast to produce ~60,000oz a year over a six-year mine life at an all-in sustaining cost of just A$723/ gold oz and a pre-production capital cost of just $67.6 million.

The MoU is legally binding and confirms the intention of Mutiny and GR Engineering to enter into an EPC contract subject to the satisfaction of certain conditions, including:

  • Mutiny obtaining the necessary finance to develop Deflector;
  • Mutiny Board approval for the development of Deflector; and
  • The parties entering into a definitive EPC contract in accordaance with the indicative terms set out in the MoU.

The EPC contract is currently proposed to be a Guaranteed Maximum Price-style contract consistent with Australian Standard Conditions of Contract A

The current plant design and throughput rate were determined from the review work completed as part of the Mine Operators Review. The revised throughput rate is based on the underground production rate of 380,000tpa of primary ore. The plant has been relocated to be adjacent to the Deflector mine site, reducing haulage and power distribution costs.

The MOU allows GR Engineering to undertake preliminary work that is pre-approved by Mutiny and to recover invoiced expenditure and commitments in relation to that work if the MoU is terminated. In order to bring Deflector into the earliest possible production, it is intended to allow preliminary work to continue on the project while some of the final approval conditions are completed and the terms of the EPC contract negotiated.




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