Genesis Minerals Ltd (ASX:GMD) is on track to start generating cash flows from the Ulysses Gold Project near Leonora in Western Australia, with mining expected to commence in late September.
The company has entered into a mining agreement with contractor SMS Innovative Mining and a toll agreement with Paddington Gold, following the delivery of a positive feasibility study.
The feasibility study demonstrated a technically and commercially viable open pit project at Ulysses West, with all in sustaining cost of A$1,060 per ounce of gold with pre-production capex of only $350,000.
The maiden ore reserve at Ulysses West is 74,000 tonnes at 4.1g/t gold for 9,700 ounces gold.
The first cash flows are expected in Q4 2016 with total estimated free cash flow of about $6 million in the first 4 months from the Ulysses West pit (at a gold price of A$1750/ounce).
Genesis has received firm commitments from investors to raise up to $1.71 million to support the development and ongoing exploration of the broader Ulysses Project.
Mining contractor SMS will provide a mix of equity and debt funding to support project development, with an initial subscription of Genesis shares worth $2.5 million at $0.025 each.
Genesis has also executed a detailed agreement with Paddington Gold, who owns and operates the 3.5 million tonnes per annum Paddington mill located 160 kilometres south of the Ulysses Project.
Under the terms of the agreement, an initial payment to Genesis will be made within 15 days of ore delivery to the Paddington ROM pad for any given batch.
All key mining approvals for the project are either in place or due imminently.
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