PERTH (miningweekly.com) – Stonewall Resources resumed trading on the ASX on Thursday, after months of absence from the exchange, announcing that it secured up to A$13.5-million in funding, and started gold production at its TGME operation, in South Africa.

The company said it had started processing pre-mined residue from the Beta mine, at the TGME operation.

The decision to start processing at the mine was supported by a concept study which confirmed the Beta miner operation as a low-cost, high-margin project, as well as a specialist peer review evaluation on the mining method, geology, safety and process flow.

Stonewall said on Thursday that the company was targeting a processing rate of some 30 000 t/m by the end of the first quarter. Feasibility work was currently under way to increase the output to around 80 000 t/m later in 2015.

The pre-mined residue would be processed using the existing TGME plant, which was recently refurbished and has a capacity of 80 000 t/m.

The TGME project has a total inferred resource of 19.34-million tonnes, grading 3.64 g/t gold for 2.6-million ounces.

Meanwhile, Stonewall also announced that it had secured funding of up to A$13.5-million from two US-based institutional investor groups.

Under the terms of the agreement, the investors would provide an initial A$1.5-million convertible note, with a 12-month maturity. The note would be convertible at 85% of an average price calculation at the time of conversion.

A further A$300 000 a month could be raised by Stonewall, for a period of 12 months, through potential share issuances. The shares would be issued at 91% of the average price calculation at the time of issuance, and would be subject to market and other standard conditions.

The amounts funded under the agreement would bear no interest and would be unsecured.

The company noted that for the initial funding, Stonewall had sufficient placement capacity for shares to be issued without shareholder approval. However, the company’s shareholders have approved an additional 10% placement.

Furthermore, as part of the recapitalisation, existing lender Australian Private Capital Investment has agreed to extend the terms of its current A$4-million loan by 12 months, to October 2016.

Stonewall went into a trading halt in November last year on news that its share sale agreement with Shandong Qixing Iron Tower, over the sale of its South African assets, had been cancelled.

Stonewall had in 2013 agreed to sell its South African subsidiary to Shandong for $141.5-million. However, the Chinese firm abandoned the transaction, citing the decline in world gold prices.

Stonewall said that it had notified the Chinese firm that it was considering all available options regarding the cancelled transaction, including taking legal actions against Shandong and its officers.

“Stonewall intends to vigorously pursue and enforce all of its rights against Shandong and, if appropriate, its officers, including potentially a claim for damages by arbitration proceedings,” the miner said.

Meanwhile, during its recapitalisation process, Stonewall received significant interest from potential investors, joint venture partners and acquirers, and the company said that it was now holding discussions with a number of these parties.