Romarco extends key contracts
TORONTO, June 14, 2012 /PRNewswire/ – ROMARCO MINERALS INC. (TSX: R) (the “Company”) is pleased to announce that in light of the recently
announced permit schedule, it has renegotiated a number of key
contracts to re-align equipment deliveries for the development of the
Haile Gold Mine. These activities are part of an overall Company
strategy for managing cash according to the new permit schedule.
Key Equipment
Romarco’s Caterpillar (“CAT”) mobile mine equipment for its Haile Gold
Mine project in South Carolina is currently being held in inventory by
the local CAT dealer, Blanchard Machinery Company (“BMC”). BMC will
deliver the CAT equipment that was previously targeted for delivery by
March 31, 2013 on a revised schedule aligned with the expected start of
construction. For BMC to maintain the inventory over the extended
schedule, the Company will incur an additional $30,000/month, bringing
the total monthly holding cost to approximately $230,000. This
agreement maintains the previously agreed pricing, ensures timely
delivery of new equipment with tires, and allows the Company to defer
the majority of the payment, approximately $29 million, until the
earlier of September 30, 2013 or when the equipment is delivered to
Haile.
Romarco has agreed with the local Hitachi shovel dealer, Flint Holdings
(“FH”) to align delivery with the expected start of construction. FH
anticipates receiving the shovel in December 2012 and will maintain the
shovel in its inventory until delivered to Haile. At that time, the
Company will pay FH a montly holding cost of approximately $11,000 and
make monthly down payment installments of approximately $43,000. This
agreement maintains the previously agreed pricing, ensures timely
delivery of the shovel, and allows the Company to defer the majority of
the payment, approximately $2.5 million, until the equipment is
delivered to Haile.
The manufacturer of the SAG and secondary Ball grinding mills has
indicated it will re-align delivery and final payments by three to six
months. This will defer the approximate $5 million final payment over
the first and second quarters of 2013.
The Company is advancing detail design engineering with a target to be
75 percent complete by the end of 2012. Equipment specification and
design that is critical for advancing engineering is being identified
and manufacturers are being selected. Romarco is purchasing the
engineering necessary for continuing design. The equipment will be
released for manufacture on a time line that coincides with project
construction. This process allows significant flexibility while
minimizing cash expenditures and maintaining the project timeline.
Diane R. Garrett, President and CEO commented: “By realigning our
equipment payments to coincide with the EIS schedule, we have
maintained our financial flexibility while ensuring we will have our
mobile mining fleet available when we are ready to start construction
and mine development. We are extremely pleased with the support we
have received from our equipment suppliers. The Company has engaged in
a number of cash conservation measures and will continue to do so in
order to preserve its treasury. The largest expenditures the Company
currently has are in the areas of permitting and engineering. Both of
these activities are vitally important to adding value to the Haile
project and positioning the Company for development activities. These
expenditures will be significantly reduced by the end of this year as
key milestones will have been completed.”
Barclays Bank PLC
Based on the US Army Corps of Engineers’ schedule for completing the
EIS, the Company has extended its agreement with its financial adviser,
Barclays Bank PLC (“Barclays”), through the end of 2013 with the aim of
securing project debt financing for up to 60% of the funds needed to
construct and commission Haile’s future mining and processing
operations. Barclays’ selected engineering firm, Pincock, Allen and
Holt (“PAH”) has completed its initial independent review and technical
audit of the Haile project’s feasibility work.
Matthew Lewis of Barclays stated: “We are extremely satisfied with the
initial technical review, which has confirmed that Haile is a quality
gold mine project. Haile is a relatively low capital cost, low
operating cost, and high-grade gold development project in a
politically stable jurisdiction. As adviser to the Company, we have
received significant interest from financial institutions regarding a
potential debt financing for Haile.”
All dollar amounts in this news release are expressed in U.S. dollars.
About Romarco Minerals Inc.
Romarco Minerals Inc. is a gold development company focused on
production primarily in the US. The Company has completed a positive
Feasibility study and is continuing exploration drilling and permitting
for its flagship project, the Haile Gold Mine in South Carolina.
SOURCE ROMARCO MINERALS INC.
