Continental Gold (TSX:CNL; OTCQX:CGOOF) has provided an update on its progress at its mine in Buriticá, Colombia, and financial status. As of September 30, 2019, the company had $78.9 million USD in cash and cash equivalents (including $6.8 million in restricted cash). To reduce liquidity risk, they are actively pursuing financing opportunities, including from existing lenders and significant shareholders.
Continental has also negotiated a binding option on a financing offer from an arm’s length third party to purchase $50 million of common shares. If Continental exercises the option, common shares would be issued on a private placement basis, at a price of $4.20 Canadian Dollars per common share, subject to regulatory approval. Closing is expected to occur during the first half of December 2019, subject to the satisfaction of certain conditions, including that no material adverse effect shall have occurred.
Continental Gold presented at the 2019 Colombia Gold Symposium, where it discussed its successes regarding social and environmental sustainability. The mine enjoys positive relations with the surrounding community.
Continental Gold also announced that it has been granted a key exploration license by the Government of Antioquia and will begin exploratory drilling. The Electra South and Orion targets are within 5km of the existing mine site. Sampling shows up to 136 grams per ton in the Electra South deposit, formerly known as Obispo.
Development activities at the Buriticá Project remain on budget and on schedule for mechanical completion in Q1 2020. Major activities during the third quarter of 2019 included:
- Overall construction progress was 83% complete.
- Total lateral development meters to date was approximately 18,200 meters; advance continued to increase and exceeded 1,300 meters per month in August and September.
- The Company completed the ventilation raise in the Veta Sur system and commenced raise excavation for ore and waste passes in the Yaraguá system.
- Construction for the 110-kV power line was completed and connection to the main power grid was pending final testing from the electric utility and Colombian governmental approval, which was achieved in Q4 2019.
- Highlights for mill area and infrastructure construction include:
- Primary crusher: Major structural steel was completed with ongoing installation of handrail and equipment guarding. All major equipment has been installed and power and control cable installation continued to advance.
- Reclaim tunnel: Major equipment installations have been completed and power and control cable installation continued to advance.
- Grinding and gravity circuits: All major equipment has been set, and small- and large-bore piping as well as electrical and instrumentation cabling are advancing.
- Leach tanks: All leach tanks have been completed with agitator and steel bridge installations. Major structural steel for the central pipe rack, platforms and stairway platforms continued to advance. Small- and large-bore piping as well as power and control cable pulling to equipment continue to advance.
- CCD area: Tank installations were completed for the CCD thickeners and the clarifier and tailing thickeners along with installation of bridge structures. The central pipe rack, platforms and stairways continue to advance. Small- and large-bore piping will continue to advance into Q4 2019.
- Merrill Crowe: All major equipment has been set and structural roof steel in preparation for roof cladding. Small- and large-bore piping, including to the barren and pregnant leach tank area, were ready to commence.
- Tailing filtration: All major equipment has been installed, and small- and large-bore piping continued advancing. Power and control cable pulling commenced.
- Tailing storage facility: Major excavation for Cell 1 was completed, and the contractor advanced the primary liner installation.