News

July 02, 2009

Focus Minerals Already Has Plenty Of Cash Flowing In From Coolgardie, As Work On A Central Processing Plant Nears Completion

By Our Man in Oz

Any time that’s spent developing a mine and the associated processing plant is disliked by investors for a simple reason: no cash flow. Near Coolgardie, in outback Western Australia, an emerging gold miner has solved that problem. Focus Minerals is maintaining cash flow while undertaking a major plant reconstruction by paying for ore to be “toll” treated. The financial effect on the company is remarkable, with the toll treating campaign expected to generate a bonus A$44 million in revenue, even while the major part of the Coolgardie project is in the construction phase. By Christmas, Focus will be one of Australia’s strongest gold miners with no debt, a retired hedging programme, its own plant in operation and being fed by a series of mines, and with the blue sky appeal of being the first miner to put a single corporate wrapper round the whole historic Coolgardie goldfield.

The value in the constant cash flow strategy was highlighted earlier this week when Focus reported on its eighth toll treating campaign which delivered a record 19,226 ounces of gold, taking to 41,401 ounces the amount of gold produced in the financial year which ended on June 30th. While the gold from Focus’s Perseverance mine was being produced at the Greenfields Mill, owned by private company FMR Investments, work continued on schedule at the Three Mile Hill processing plant which will be...