Project Financing

RNS Number : 1000A

Ovoca Gold PLC

29 July 2008

 



Ovoca Gold PLC

29 July 2008

Ovoca Gold plc ('Ovoca' of the 'Company')

Project Financing

Ovoca (London AIM (OVG.L), Frankfurt (OVX.GR) and Dublin IEX (OVX.IR)) is pleased to announce that it has signed a non-binding term sheet with a major Russian banking institution for a USD 92.7 million project loan facility to cover capital costs for the Goltsovoye silver mine project. The contingency applied to the pre production capital costs estimate by Scott Wilson Mining has been increased by 15% in the light of recent inflation. Proceeds of the facility will be used to finance construction and commissioning of the Goltsovoye silver mine. The bank due diligence procedures is expected take 10 to 12 weeks to finalize  

According to the Bankable Feasibility Study (BFS) carried out by Scott Wilson Mining, annual average mine production will be 260,000 tonnes of ore, and 5.8 million ounces of silver, during a six year mine life based on the reserves in Ore Zone I. In early 2007 Wardell Armstrong completed a JORC silver resource estimate of 69 million ounces in Ore Zones I and II. The Russian Government Commission for Natural Resources (GKZ) later approved a resource of 81.33 million ounces of silver in these Zones. The mine life is expected to be considerably longer than the 6 years. 

In addition to Goltsovoye,  Ovoca has a number of other projects located in the Kola Peninsula at advanced feasibility stages, such as Pellapahk which is a molybdenum-copper project with a potentially world class molybdenum resource.

Leonid Skoptsov, the Ovoca CEO, comments:

'I am glad that despite the turbulent financial and adverse credit markets, the Goltosovoye project has continued to attract significant interest from a number of banks. The signing of a term sheet with a major Russian bank is yet a further indication of the strength of both the project and the Russian financial system.'

The above information has been reviewed and verified by Roger Turner, a Director of Ovoca, for the purposes of Mining, Oil and Gas Companies issued by The London Stock Exchange in March 2006. Mr. Turner with 41 years mining engineering, management and consulting experience, graduated as a mining engineer from the Camborne School of Mines and has an MSc degree in Economic Geology from Leicester University. He is a member in good standing of the Institute of Materials, Mining and Metallurgy and is a UK Chartered Engineer.

For further information contact

Ovoca Gold plc
Mr. Danesh Varma CFO	[phone] [e-mail]
Mr. Leonid Skoptsov CEO	[phone] [e-mail]
Davy
John Frain / Fergal Meegan	[phone]

 

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