{kanada_flagge}Pilar Gold is wasting no time following its November 2022 acquisition of the Laiva gold mine in northern Finland and its associated gold processing plant, the largest in Europe. The company announced at the beginning of the year that the Laiva team is preparing to restart operations this spring. The target for 2023 is production of 50,000 ounces at an estimated all-in sustaining cost (AISC) of $1,400 per ounce. The longer-term target is annual production of 100,000 ounces.
{kanada_flagge}Pilar Gold is wasting no time following its November 2022 acquisition of the Laiva gold mine in northern Finland and its associated gold processing plant, the largest in Europe. The company announced at the beginning of the year that the Laiva team is preparing to restart operations this spring. The target for 2023 is production of 50,000 ounces at an estimated all-in sustaining cost (AISC) of $1,400 per ounce. The longer-term target is annual production of 100,000 ounces.
Laiva is a fully permitted, turnkey operation with everything in place for a rapid restart. The plant has some of the most modern equipment available. The replacement value of the plant is estimated at €400 million (equivalent to C$2.38 per share of Pilar Gold), except that it would take at least 2 years to complete. Pilar Gold acquired Laiva out of bankruptcy for US$23.5 million equity, equivalent to C$0.13 per share of Pilar Gold.
To fund the reopening, Pilar has announced a C$8 million capital raise. The capital round is to be on the same terms as last year’s round: C$1 per share and a full warrant for 2 years at C$1.50 per share. Concurrent with the capital raise, the company intends to solicit expressions of interest for a $15-20 million credit facility for Laiva. The closing of this facility, however, will not affect the timeline for the relaunch, it said. However, the money will be needed to expand production to 100,000 ounces per year, it said.
Figure 1: The management team at the Laiva mine. The mine’s as-new facilities are in the background.
The Laiva gold mine has a state-of-the-art processing plant with a capacity of 6,000 tons per day, which was built in 2010 at a cost of €240 million and is still in excellent operating condition. It appears that the Laiva plant is very similar to the Pilar processing plant in Brazil, so the team was able to identify a number of relatively simple but important adjustments to turn Laiva into a profitable operation. The operation is ready for mining and even has blasted material in the southern pit that was left over when mining was unexpectedly halted in December 2021.
Electricity is an important factor in Laiva’s profitability. As the Finnish Olkiluoto 3 (OL3) nuclear power plant will start regular electricity production in March this year after 17 years of construction, the price of electricity could fall. The commissioning of the OL3 nuclear power plant will increase Finnish grid capacity by 14%. Calculations assume a price of 15 cents/kWh this year, compared with 15.35 cents/kWh in 2022.
Laiva has faced some challenges in the past, but one key advantage is that Pilar took over the company debt-free and without creditors from bankruptcy proceedings. The other big difference is that the price of gold is much higher today and could continue to rise. Pilar is planning an investor visit to Laiva in April. Exact dates are yet to be announced, he said.
Disclaimer: GOLDINVEST Consulting GmbH offers editors, agencies and companies the possibility to publish comments, analyses and news on http://www.goldinvest.de. These contents serve exclusively the information of the readers and do not represent any kind of call to action, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. Furthermore, they are in no way a substitute for individual expert investment advice and do not constitute an offer to sell the stock(s) discussed or a solicitation to buy or sell securities. This is expressly not a financial analysis, but an advertising / journalistic text. Readers who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. There is no contractual relationship between the GOLDINVEST Consulting GmbH and its readers or the users of its offers, because our information refers only to the company, but not to the investment decision of the reader.
The acquisition of securities involves high risks, which can lead to a total loss of the invested capital. The information published by GOLDINVEST Consulting GmbH and its authors is based on careful research. Nevertheless, any liability for financial losses or the content guarantee for topicality, correctness, adequacy and completeness of the articles offered here is expressly excluded. Please also note our terms of use.
According to §34b WpHG and § 48f Abs. 5 BörseG (Austria) we would like to point out that GOLDINVEST Consulting GmbH and/or partners, principals or employees of GOLDINVEST Consulting GmbH hold shares of Pilar Gold and therefore a conflict of interest exists. GOLDINVEST Consulting GmbH also reserves the right to buy or sell shares of the company at any time. Under certain circumstances this can influence the share price of Pilar Gold. GOLDINVEST Consulting GmbH currently has a commissioned relationship with the company, which is reported on in the context of the internet offer of GOLDINVEST Consulting GmbH as well as in the social media, on partner sites or in email messages, which also represents a conflict of interest. The above references to existing conflicts of interest apply to all types and forms of publication used by GOLDINVEST Consulting GmbH for publications on Pilar Gold. We also cannot exclude that other stock letters, media or research firms discuss Pilar Gold during the same period. Therefore, symmetrical information and opinion generation may occur during this period. No guarantee can be given for the correctness of the prices mentioned in the publication.
