Global Minerals Trader MRI Trading AG Will Also Support Project Debt Financing
Bardoc Gold Limited (ASX: BDC) has taken another key step towards the financing and development of its flagship 100%-owned Bardoc Gold Project, located 50km north of Kalgoorlie in WA, after entering into a Binding Agreement with leading global minerals trader MRI Trading AG for the sale of gold concentrates from the Project.
MRI was selected following an extensive vetting process from a short-list of high calibre, global traders, all of which expressed very strong interest in Bardoc’s gold concentrates. This process clearly demonstrated MRI’s depth of experience in the global mining commodities market, both with customers and financial institutions.
The execution of a Binding Offtake Agreement, which covers ~50% of the forecast life-of-mine (LOM) gold production expected to commence at year three from the Bardoc Gold Project, represents a further important step towards establishing the company as a significant new mid-tier Australian gold producer in Kalgoorlie’s Eastern Goldfields.
Bardoc Gold’s CEO, Robert Ryan, said the negotiation of the Offtake Agreement represents a significant de-risking milestone in the development of the +100kozpa Bardoc Gold Project, providing a solid foundation for its project debt funding strategy.
“This is a really important milestone which follows an exhaustive off-taker selection process, and we are absolutely delighted to announce MRI as our off-take partner for gold concentrate,” Mr Ryan said.
“This highly detailed and informative process has resulted in very competitive off-take terms with regard to both valuable metal payables and associated costs, as well as favourable payment and shipping terms.
“This process also highlighted the extensive Western Australian experience and global reach of our offtake partner MRI. We are pleased to be partnering with a proven group, who are the world’s largest independent trader of non-ferrous concentrates.
“We are grateful to all the participants in this process who have committed their time and energy to working with us to achieve this outstanding outcome.
“We are now focused on completing our Definitive Feasibility Study in Q1 2021 while continuing our expansive +40,000m exploration program targeting new discoveries, which should continue to generate news-flow right up until Christmas and into the early part of 2021.”
The execution of the Binding Offtake Agreement follows the delivery of a positive Pre-Feasibility Study (PFS) in March 2020 which outlined average gold sales of 135,000ozpa over seven years of mill production resulting in an NPV (pre-tax 8%) of A$332 million and 32% IRR based on a A$2,100/oz gold price and pre-production capital of A$142.4 million.
A comprehensive metallurgy testwork programme has demonstrated a simple bulk sulphide flotation flowsheet produces a consistent flotation response and a high gold recovery to concentrate across the entire Aphrodite deposit. The terms of the Binding Off-Take Agreement remain confidential but combined with the detailed metallurgical test-work, compares extremely favourably to the PFS with:
- gold concentrate expected to run up to 100g/t;
- total gold recovery and payable of 92% compared with the assumptions in the PFS of 85%; and
- unit treatment cost below the assumptions in the PFS.
Bardoc and MRI will now move to full form documentation for a formal Offtake Agreement in parallel with the project debt financing. Delivery of the Bardoc Gold Project Definitive Feasibility Study (DFS) is targeted for late Q1 2021.
The off-taker selection process was managed by Bardoc Gold’s financial advisor, BurnVoir Corporate Finance.
MRI is the world’s largest independent (non-asset holding) trader of non-ferrous concentrates with over 2 million tonnes traded per annum. MRI employs 85 staff across a global network of nine offices, and maintains a local presence in 15 countries, including agents.
