Gowest gets $15m boost for Bradshaw from Hong Kong’s Greenwater

Gowest will issue to Greenwater promissory notes in the principal amount of C$7.5 million. If shareholders approve, the units will be convertible into units priced at C$0.13 each, raising a further C$11.5 million. Each unit will consist of one additional common share and one share purchase warrant of Gowest within two years at a price of C$0.16 during the first year and C$0.17 during the second.

Gowest began drilling the Bradshaw deposit in 2010 and produced a prefeasibility (PFS) study in 2015. At that time and using a gold price of $1,200 per ounce, the project carried an after-tax net present value (at a 5% discount rate) of C$29.2 million and an internal rate of return of 27%.

The initial capital investment would be C$21.5 million for an underground mine producing 40,500 oz. of gold annually over an 8.5 year life. Payback would be achieved in 3.5 years. The all-in sustaining cost was estimated to be $891 per oz.

The PFS estimated indicated resources at 2.1 million tonnes grading 6.19 g/t gold (422,059 oz.) and inferred resources at 3.6 million tonnes grading 6.47 g/t gold (754,553 oz.). A cut-off of 3 g/t gold was used in the study.

At the conclusion of this financing, Greenwater will be a 20% shareholder as well as a creditor of Gowest.