CBH considers production step-up
Wednesday May 6, 2009
CBH Resources is actively pursuing funding opportunities in the hope of returning Endeavor Mine to a higher level of production.
The company outlined its plans in a quarterly activities report released last week.
Managing director Stephen Dennis said CBH is currently in talks with the state government for cash access after its bank balance took a massive blow due to bank requirements.
“Significant one off cash items include $7.8million paid to the National Australia Bank in March to fully cash collateralise security bonds for Endeavor.
“The company was very disappointed by NAB’s decision to require full cash collateralisation of its environmental security bonds, and has approached the NSW Government seeking an improved arrangement whereby the company can access its restricted cash funds for capital development purposes at Endeavor,” Mr Dennis said.
“If market conditions improve, the company will accelerate planning efforts to return production at Endeavor to a higher level.
“This will require a significant amount of development capital to be spent at the time, consequently an arrangement whereby the company can access the $12 million of restricted funds which are held as security for governmental environmental bonds will be essential,” he said.
Mr Dennis said the company is still in discussions with a number of parties regarding financing and investment options, however the talks “are not advanced enough to warrant further disclosure”.
The company is reporting that in the quarter ending March 2009, Endeavor Mine has produced above budget lead and zinc.
Mr Dennis said cash costs are lower than previous quarters, and the mine has also achieved a pleasing safety record.
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