True Gold inks $10m refinancing deal with precious metals merchant
JOHANNESBURG (miningweekly.com) – Toronto-listed gold producer True Gold has entered into an equipment refinancing facility with precious metal merchant Auramet International for $10-million, the company said on Monday.
“This fixed cost equipment loan gives us flexibility to draw funds that can be used for non-project spending, including exploration.
“There are no costs for repaying the loan early and it provides an added start-up contingency while retaining the upside leverage to gold. We remain on schedule and budget at the Karma mine, in Burkina Faso, with first gold pour anticipated in March,” commented True Gold president and CEO Christian Milau.
The term of the loan was between January 2016 and June 30, 2017, with interest set at the London interbank offered rate plus 9.75%. The deal also saw the miner committing to refining 200 000 oz at a fixed $5/oz discount to the spot gold price.
The number of ounces at the fixed $5/oz discount to the gold price would be prorated to the total amount of the $10-million drawn.
Some $6-million were available for drawdown on closing and the remaining $4-million upon announcement of commercial production of the Karma mine.
“This financing provides an alternative to drawing all of the $20-million increase option from the stream finance providers and also provides an additional and flexible source of capital as we move to production,” added Milau.
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