QuickView: Edgewater Exploration

Edgewater Exploration recently held an analyst and investor site visit on its 100%-owned Corcoesto gold property in north-west Spain. The project has been progressing well and recently had its EIS approved. Importantly, Corcoesto has been processed as a strategic industrial project, and full approval is expected in March. As a result, the project will have expedited timelines and priorities concerning water and energy access. The Corcoesto gold deposit has an NI 43-101 compliant resource of 26Mt grading at 1.76g/t Au, containing 1.47Moz Au. Although 78% of the resource currently lies in the inferred category, Edgewater’s recent infill-drilling programme forms the basis of an updated resource estimate that will be released by early-March 2013. Management also expects development of the c US$160m open-pit mine and processing plant during Q3/Q413, with production in Q115.

Negotiated a US$120m debt mandate
Subject to the submission of a BFS, which management expects by July 2013, Edgewater has secured a US$120m term sheet. The 2011 PEA had an NPV of US$340m and capex estimated at $160m. Additional funding (c US$40m) is expected to be equity funded given a current cash position of c US$5.3m.

Updated NI 43-101 resource: Converting inferred into M&I
The company has engaged Tetra Tech to provide an updated resource estimate, which is expected to convert the inferred resources to the indicated and measured category. The updated resource estimate is expected by early-March 2013.

EIS approved: Mining licenses and strategic status by Q213
The project continues to receive strong support from regional authorities and local communities. All issues or concerns with the proposed mine design are currently being addressed by the company and final approval is expected in by Q213.

Risks: Grade control and reconciliation
We believe management has the experience necessary to successfully develop the Corcoesto gold deposit. The main risks, among other things, will be grade control and reconciliation during mining and processing of this relatively low-grade deposit.

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