Business News Americas reported that Canada's Andina Minerals could see its Volcan gold project in Chile's region III enter production as soon as the H2 of 2015 as long as a project financing package falls into place early enough.

Mr George Bee president and CEO of Andina Minerals said that "If the financing is there toward the end of next year when we're getting a permit, you're looking at 18 to 24 months to get into production."

Mr Bee said that Andina presented the Volcan environmental impact study to Chile's environmental evaluation service in July and is expecting to receive the first round of observations by early November. Approval is expected by end 2013 assuming three rounds of observations and modifications.

Andina's focus in the meantime will be on securing financing for construction, a difficult task considering the USD 575 million prefeasibility capex estimates and the company's USD 50 million market capitalization.

Mr Bee said that the idea is to structure a debt package to cover 50% to 60% of the capital requirements while the company could look to equity markets or consider bringing on a partner to cover the remainder. That's what's holding us up at the moment but we're going to be ready to go next year.

Meanwhile, the company is likely to face additional pressure in finding financing as the final feasibility study is likely to show a higher capex figure than that of the prefeasibility. The initial capital is going to go north of that fair warning but it's not one of those billion or multi billion dollar projects.

It's worth noting that the documents submitted for environmental evaluation in July showed investment at USD 800 million but did not specify whether part of that was not attributable to initial capital.

Source - Business News Americas

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