TORONTO (miningweekly.com) – Canadian gold producer Centerra Gold has secured a $150-million project financing term loan that it would use to develop the Öksüt project, in Turkey.

The company’s Turkish subsidiary Öksüt Madencilik Sanayi ve Ticaret (OMAS) will use the facility to finance a substantial portion of the construction, development and operation of the Öksüt gold mine and its related infrastructure, in the Kayseri region of central Turkey.

Secured by the Öksüt assets and being nonrecourse to Centerra, the 5.75-year term facility of up to $150-million was fully underwritten by UniCredit Bank as sole mandated lead arranger and bookrunner. The interest rate was fixed at the London interbank offered rate plus 2.65% to 2.95%, dependent on project completion status, with no obligatory gold hedging requirements.

Advances under the facility were subject to customary conditions precedent, including receiving applicable project permits and approvals, the company advised on Tuesday.

“We are pleased to have been able to arrange this attractive nonrecourse project financing to fund a substantial portion of the development and construction of the Öksüt project. This is a testament to the robustness and strength of the Öksüt project. This facility will provide us with continued financial flexibility and help maintain our balance sheet strength to enable us to deliver on our growth pipeline,” CEO Scott Perry stated.

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The Öksüt project’s estimated mineral reserves as at June 30, 2015, were 26.1-million tonnes at an average grade of 1.4 g/t of gold containing 1.2-million ounces of gold using a cutoff grade of 0.3 g/t and a gold price of $1 250/oz.

The feasibility study envisioned a conventional openpit and heap-leach operation.

The heap-leach pad had been designed with an ultimate ore capacity of 40-million tonnes.

Electrical power was expected to be supplied to the project by a dedicated 28 km power line connected to the local power grid.

Water supply is expected to be sourced from two company-owned water wells, which have been fully permitted.

Mining was planned to be conducted by a local contractor using a conventional truck-and-shovel fleet using small, selective loading equipment and 36 t trucks.

The life-of-mine (LoM) strip ratio was expected to be 2:1.

The ore would be crushed to 38 mm through two stages of crushing and would be placed on the heap-leach pad at a rate of 11 000 t/d.

LoM gold recovery was expected to be 77%.

The project was expected to process 26.1-million tonnes of ore at an average grade of 1.4 g/t gold over eight years, producing 895 000 oz of gold at an average all-in-sustaining cost of $490/oz sold.

The project had a base case net present value, at an 8% discount rate, of about $242-million and an internal rate of return of 42.5%.

Preproduction and construction capital was expected to be a modest $221-million, which included a $25-million contingency.