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Reinvigorated Otso rises on return to trade, production plans

Shares in Otso Gold jumped 20% yesterday as the company resumed trade and outlined plans to restart mining at its namesake project in Finland, previously known as Laiva.
Reinvigorated Otso rises on return to trade, production plans Reinvigorated Otso rises on return to trade, production plans Reinvigorated Otso rises on return to trade, production plans Reinvigorated Otso rises on return to trade, production plans Reinvigorated Otso rises on return to trade, production plans

Otso Gold’s namesake, permitted project in Finland

Staff reporter

The company, formerly Firesteel Resources then Nordic Gold, underwent another rebrand last year along with a management and board overhaul after it had stumbled on various issues at the mine with a stop-start history.

In a letter to shareholders yesterday, president and CEO Brian Wesson said the company was aiming for production at the Otso gold mine in April 2021.

He noted the company had made the decision to proceed without establishing reserves or yet completing a feasibility study.

"Given the high gold price environment, it may be tempting to rush to restart without completing the necessary geology or preparatory works as has been the case in the past," he said, before outlining the company's planned pathway to production.

He said some €250 million had already been spent at the mine and proven plant and the company planned to drill a further 4,100m and release an updated resource and new feasibility study by year-end.

Tetra Tech was appointed to complete the feasibility study in May.

"Over the past year, management has overcome significant obstacles including unforeseen creditors on site, the significant debt burden arising from the gold loan, lack of fit for purpose accounting systems on site, lack of technical knowledge, ongoing care and maintenance costs and a global pandemic," Wesson said.

"In summary, management has mobilised our experience in building, owning and operating mines globally to produce a strong knowledge base and ensure the operations, accounts and procedures are fundamentally robust to support a successful restart."

Otso had executed an C$8 million draw-down equity financing facility in May with Alumina Partners. It said $400,000 had been drawn down to date, in its latest MD&A filed last week.

Otso had been subject to a cease-trade order due to the delay in filing its financial statements.

Its shares have ranged from 2-11c over the past year and closed up 1c or 20% yesterday to 6c, valuing it at $14 million (US$10.6 million).