By Chuck Crumbo
Published July 13, 2012
Even though 100-ton haul trucks worth millions of dollars are parked in a warehouse, about 110 workers are on the job at the Haile Gold Mine in Lancaster County.
“We are not twiddling our thumbs,” Diane Garrett, president and CEO of Romarco Minerals, said Wednesday.
Just a couple of months ago, Garrett and her team had been looking at a schedule that called for several pieces of equipment to be delivered to the mine by September so construction could begin on production facilities.
However, those plans were revised in May after the Army Corps of Engineers publicly posted its schedule for completion of an environmental impact statement for the federal 404 Wetlands permit. The Corps says it plans to issue a final decision on the permit by Aug. 16, 2013.
Although actual mining of the site cannot begin until Romarco obtains the wetlands permit, Garrett said the company is pushing ahead with advance detailed design and engineering for the project.
Romarco also is adjusting equipment orders to align with the Corps' schedule, and hang onto its cash. At the end of the first quarter Romarco said it had $98.5 million cash on hand.
The agreement maintains the previously agreed price and ensures timely delivery of the new equipment with tires, Garrett said. The agreement allows Romarco to defer the majority of the bill – about $29 million – until Sept. 30, 2013 or when the equipment is delivered.
Romarco also worked out a deal with the Hitachi dealer, Flint Holdings, to delay delivery of a huge shovel. Flint expects to receive the shovel in December and will keep the machine in its inventory until the machine is delivered, according to Romarco.
When that happens, Romarco will pay Flint a monthly holding cost of $11,000 and make monthly down payment installments of $43,000. The agreement also allows Romarco to defer the majority of the payment – approximately $2.5 million – until the equipment is delivered.
Romarco also worked out a deal with the manufacturer of the grinding mills, deferring the $5 million final payment over the first and second quarters of 2013.
Canceling orders wasn’t an option.
For example, Caterpillar reported in March it was sitting on a record backlog of $30 billion in mining and construction equipment. New orders for haul trucks could take until sometime in 2014 to fill, Caterpillar said.
“There’s a lot of pressure on us at the moment,” Garrett said, noting that the company has yet to make its first dollar. “We have very good, solid support from our investors.”
Romarco’s new schedule calls for the first gold bars to be poured between the fourth quarter of 2014 and first quarter of 2015, Garrett said.
Total gold resources at the mine near Kershaw stand at 4 million ounces – both measured and indicated – plus another 800,000 ounces of inferred resources, according to Romarco.
Romarco believes the mine can produce 140,000 ounces of gold annually for at least 12 years. Currently, gold presently is selling for more than $1,575 an ounce.
The wetlands permit is the only federal permit Romarco requires for the Haile project. Other pending permits include, but are not limited to, the State 401 Water Quality Certification and the State Mine Operating permit.
The state Department of Health and Environmental Control will schedule its public hearing for the state permits following the filing of the draft environmental impact state by the Corps, Romarco said in a statement.
Gold was first discovered on the 4,000-acre site in 1827 and operated intermittently through the 1980s. Romarco acquired the property in late 2007 and reopened the mine in 2010.