Management expects to have the Lupin camp open for the entire year to allow for the above underground work; for minor mill and powerhouse repairs by contractors to facilitate a quicker restart of operations; and for certain health, safety and environmental activities to ensure on-going compliance with key permits.
Management is budgeting approximately $9.5 million in cash expenditures to carry out the above stated 2013 Lupin activities, including capital expenditures.
The Company's year-end cash balance was approximately $15.9 million as of December 31, 2012. In addition to this year-end cash balance, management has secured an equipment loan facility with a Swedish bank to fund approximately $6.1 million of the new underground mining equipment budgeted for at the Bjorkdal mine. Individual equipment loans under this facility will be amortized evenly over 60 months, bear variable interest at 3-month STIBOR (Stockholm Interbank Offered Rate) plus 2.16% per annum (which would equate to a current rate of under 3.5% per annum), and will be secured by the underlying equipment and by a parent company guarantee provided by Elgin Mining.
The Company believes that it has sufficient cash resources to carrying out its budgeted plans for 2013. However, to improve the Company's liquidity against unforeseen events and from budget variations or shortfalls at its Bjorkdal mine, management is currently in discussion with numerous external debt and equity providers for additional financing. Depending on market conditions, management may pursue the available financing options that provide the most attractive terms within the Company's risk tolerance.
Elgin Mining Inc.
Elgin Mining is a Canadian based company focused on production at the Bjorkdal Gold Mine in Sweden, which surpassed its first millionth ounce of gold production in 2010, and on the exploration and development of the Lupin gold mine and Ulu gold project, both located in Nunavut, Canada. In addition, Elgin Mining's portfolio includes a 29.5% interest in Auracle Resources Ltd., which is exploring the Mexican Hat property in Arizona, an exclusive right and option to earn a 60% interest in Lincoln Mining Corporation's Oro Cruz (California) and La Bufa (Mexico) gold projects and an option to earn a 60% interest in North Arrow Minerals Inc.'s Contwoyto gold project located adjacent to the Lupin gold mine in Nunavut, Canada. Elgin Mining also selectively reviews opportunities to add advanced stage development projects to its portfolio. The Company has a strong balance sheet, generates cash flow from gold sales, and remains un-hedged.
For further information, please visit the Company's web site at www.elginmining.com.
This document contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as "forward-looking statements" are made as of the date of this report or as of the effective date of information described in this report, as applicable. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, without limitation, statements with respect to: (i) the amount of mineral reserves and mineral resources; (ii) the amount of future production over any period; (iii) the amount of waste tonnes mined; (iv) the amount of mining and haulage costs; (v) cash costs; (vi) operating costs; (vii) strip ratios and mining rates; (viii) expected grades and ounces of metals and minerals; (ix) expected processing recoveries; (x) expected time frames; (xi) prices of metals and minerals; (xii) mine life and mine plans; (xiii) capital expenditures; and (xiv) success of exploration activities. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions of future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "projects", "estimates", "envisages", "assumes", "intends", "strategy", "goals", "objectives" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.
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