Havilah successfully explored, financed and developed the Portia gold mine at a time when it was extremely difficult to raise finance for new gold mines. Through the process Havilah made the successful transition from explorer to miner and developed valuable mine operating skills. The experience gained from mining Portia and the strong working relationship forged with contracting partner, Consolidated Mining & Civil Pty Ltd (CMC), were ultimately the two key factors that led to Havilah being able to divest the Portia mining lease (ML6346) that includes the North Portia copper-gold project on favourable terms.
Gold mining commenced at Portia on 30 March 2015 under an innovative 50: 50 shared risk / shared revenue arrangement with CMC, a well respected and experienced Broken Hill based mining contractor.
Just over one year later, after removal of approximately 5 million cubic metres of barren overburden and the successful construction and commissioning of a gravity gold processing plant, Havilah poured its first gold and the mine achieved an average quarterly production of almost 8,000 ounces for the half year until 31 January 2017. Havilah paid off all debt in November 2016, several months ahead of time.
The original 50:50 revenue / cost sharing arrangement with CMC was restructured in November 2017 to a 15% revenue royalty stream for Havilah from all gold production. All day-to-day management of Portia operations was transferred to CMC at this time. By the end of 2018, the Portia gold mine is expected to reach the base of the oxidised ore and practical depth limit of mining, without a major cutback of the open pit.
CMC and Havilah have recently closed a deal in which Havilah sold the Portia mining lease to CMC for a sum of $14.7 million and a 2% NSR. The agreement provides for $13.5 million in staged cash payments over an expected 18 month period commencing at the end of June 2018. The current Portia 15% gold revenue stream will remain in place until 30 November 2018. The transaction involved the immediate replacement of Havilah’s share of the Portia rehabilitation bond of $1.2 million, with Havilah having no further exposure to rehabilitation liabilities.
Based on the shared Portia mining experience, Havilah is confident that CMC has the capability to mine and process the North Portia copper-gold ore and to generate significant future royalty cash flow for Havilah. This transaction both realises value for Havilah and allows it to focus on higher priority projects such as the Mutooroo copper-cobalt project.