By FRANK ASAELI
EMPEROR Mines Ltd is undertaking a massive corporate restructure after the company’s production profile changed significantly during the second quarter.
This was revealed in the company’s June quarter overview released recently.
The corporate structure follows the signing of a conditional agreement to sell the company’s 20% interest in the Porgera Joint Venture (PJV) to Barrick Gold Corp.
The total consideration for the sale of the joint venture interest was to be US$250 million (K678 million), plus an adjustment amount to be paid in cash.
The effective date of the transaction was April 1, 2007.
After this date, Emperor no longer received production revenue from the operation in favour of interest revenue arising from the US$250 million sales price.
Following completion of this transaction and a planned capital return of A$0.05 per ordinary share, Emperor will have no debt or ongoing hedge liabilities and will have cash resources totalling approximately A$63 million (K152 million).
The company’s gold hedge book was closed during the quarter in review at US$34.2 million (K93 million) with effect from last May 14.
The settlement was deferred by agreement with the ANZ Bank until Dec 31, following the receipt of funds realised from the sale of Emperor’s stake in PJV.
This deferral facility attracted interest at LIBOR (London interbank offered interest rate) + 3.7% margin, which was also payable on settlement in December.
Emperor’s key mining assets now comprise the wholly-owned Tolukuma gold mine, and a significant copper and gold exploration portfolio incorporating over 5, 000sqkm of exploration in its mineral-rich tenements.
Gold production at Tolukuma increased by 10% over the quarter, producing 10,561 oz/gold compared with 9, 483 oz/gold for the previous quarter, with the operation delivering improved head grade of 7.54g/t (+21% on previous quarter) and increased mill throughput (+4% on previous quarter).
Cash costs per ounce decreased by 19% to A$807 (K2,191.14)oz.