Published Feb. 21, 2013
Romarco Minerals reported Thursday that it had about $54 million on hand as it waits for federal and state environment officials to green-light plans to begin production at the Haile Gold Mine in Lancaster County.
The company, which had aimed to begin construction of production facilities in September, has conserved cash by renegotiating the delivery of mining equipment worth millions of dollars.
For example, Romarco amended its agreement with Blanchard Machinery Co. for the delivery and final payment for its Caterpillar mobile mine equipment.
If needed, the amendment extends the delivery schedule and final payment of approximately $29 million — originally scheduled for Sept. 30 — by six months with an option to extend another six months. The cost for the amendment and the extension option will be about $230,000 monthly, Romarco said.
Also, the dealer for the company's Hitachi shovel needed to excavate the site — Flint Equipment Co. of Albany, Ga. — is storing the machine in Savannah, Ga.
The agreement with Flint calls for Toronto-based Romarco to take delivery of the shovel no later than February 2014. The final payment will be $2 million.
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.
The only federal permit Romarco needs for the Haile project, located near Kershaw, is a Section 404 Wetlands from the U.S. Army Corps of Engineers.
Romarco also needs state permits such as a Section 401 Water Quality Certification and a Mine Operating, which are issued by the S.C. Department of Health and Environmental Control.
As part of the permitting process, the Army Corps has been working on an Environmental Impact Statement.
The corps had planned to have a draft available by Dec. 14. However, that process has been delayed as the agency has made more than 300 requests for additional information.
Also, Romarco has changed the mine layout, requiring the corps to better assess the potential effect of mining on surface and groundwater.
Romarco said its redesign reduces wetlands impact by 25% and stream impacts by 32%.
“This data collection process, along with the necessity of accurately characterizing the potential effects of mining on surface and groundwater resources, has led to the need for a revised schedule,” the corps said on its website.
A revised schedule for completion of the environmental review process has not been posted.
Romarco’s new production schedule calls for the first gold bars to be poured between the fourth quarter of 2014 and first quarter of 2015.
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.
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.