The price tag for the development nudged up US$2.9mln compared with previous estimates, according to the company’s definitive feasibility study (DFS) issued earlier Monday.
However the figure, US$23mln all in, is still less than half the capex originally set aside for the development, Hutton pointed out. Meanwhile the additional expenditure will allow it to stockpile material.
“Stockpiling is going to be a big kicker,” he told Proactive Investors.
“The benefit being we are able to re-engineer the grade in-situ so we have a higher grade reporting to the plant in the first six years.
“It is money well spent. We could take the view we are not going to build the stockpiles and stay with a much lower grade.
“We think what we plan now is prudent. We think it is the right way to do this and we think the bill for this is insignificant in terms of the overall ambition we are trying to achieve here. And that is really to make the cash to exploit the bigger opportunity here.”
The initial plan is to focus on the oxide cap of the 3.2mln ounce resource in order to generate near-term cash flow at low capital cost.
The results of the DFS were based on a maiden reserve of 136,000 ounces, just 17% of the mining inventory.
However, the plan eventually is to develop a far bigger mining operation targeting one million ounces.
In the meantime, phase one remains on track for first production of gold in June next year.
At the same time work on the pre-feasibility study for the more ambitious second phase is in progress. This study is expected to be complete in September or October.
Hutton also confirmed it could have a financing deal in place “within weeks”.
“We are open to a combination of debt and equity,” he explained.
“Over the next two to three weeks we will close that transaction. There is one particular funder in mind, but we will continue actively seek other sources as well.
“But very clearly we are in advances discussions to secure the funding [of the project].
“We are going to building this mine by quarter one next year.”