Robust Resources (ASX:ROL) has announced it’s going ahead with its proposed acquisition of the Andash copper-gold project from Kentor Gold (ASX:KGL) for a cash consideration of A$15M.
Whilst the Andash project has excellent grades and an excellent feasibility study, outlining a NPV8% of $241M, we aren’t sure this transaction will be very accretive to Robust Resources, as other companies operating in the Kyrgyz Republic such as Centerra Gold (CG.TO) seem to encounter their fair share of problems with the locals which regularly causes them to halt their operations.
If Robust is able to overcome the local protests and continues to receive governmental support to develop the project, the acquisition of Andash could be a good step forward for the company, if they are able to find financing for the project. The capex was estimated at $96M back in 2010, so this number will probably have increased towards $125-140M. This might be a big hurdle for Robust Resources which currently has a marketcap of only A$22M.
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Disclosure: The author holds no position. Please see our disclaimer for current positions.
