Metals Exploration will seek more funds to keep its Runruno Gold Project in the Philippines operational. The project ramp-up is still being hampered by permit delays and processing issues.
Gold production and revenue from sales have been lower than forecast, which the company says has put significant pressure on cash reserves.
Nevertheless, Metals Ex has four very supportive shareholders, including property developers the Candy brothers, and says it is confident of negotiating further working capital funding prior to June 30 when the first repayment of US$10.7 million is due following a US$81 million debt rescheduling last December.
At that time, the miner had cash reserves of £6 million, but now says that without the working capital facility or additional funding it will struggle to meet the payment deadline.
Up until the end of March, Runruno had produced 16,552 ounces of gold, with design capacity expected to be achieved in the second half of 2017.
In its March quarter summary, Metals Ex said the project remained in the ‘test running and debugging’ phase pursuant to its Financial or Technical Assistance Agreement (FTAA), having achieved this status midway through 2016.
This status permits the project to fully commission all of its operations including the mine, processing plant and residual storage impoundment (RSI), and to debug and ramp-up the operation towards design parameters.
Runruno is about 330km north of Manila in the mineral rich province of Nueva Viscaya. The area has been known to be abundant in gold and other precious metals since the early 1960s and has enjoyed a varied exploration history.