PERTH (miningweekly.com) – Gold miner Doray Minerals has repaid a loan over its newly acquired Deflector gold project, in Western Australia.
In May this year, Doray announced that it had reached an agreement with Sandstorm Gold to terminate a metals purchase agreement over the Deflector gold project, allowing for the simplification of mining finance.
Sandstorm previously loaned $6-million to Deflector’s previous owner Mutiny Gold, which had the option to repay the loan, plus interest, by April 16, 2015, or to convert the loan to a metals purchase agreement where it would sell 2.6% of gold production from Deflector to Sandstorm at $500/oz for the life of the mine.
The loan repayment date was extended to October 16, 2015, as part of Doray’s October 2014 takeover offer for Mutiny.
Doray on Tuesday noted that the company had reached an agreement with Sandstorm to reduce the loan payout figure from $8-million to $7-million, on the basis that the loan would be repaid on June 12, rather than October 15.
The $7-million loan repayment had now been made, and Sandstorm’s rights under the metals purchase agreement had now been terminated.
Doray told shareholders that in order to repay the loan, the company had refinanced the existing project finance facility over its Andy Well mine and extended the facility by A$7.8-million to cover the payment to Sandstorm.
Doray’s debt balance currently stood at A$25.9-million, with its Andy Well project finance facility being extended by two quarters, until December 2016. Doray was scheduled to make a loan repayment of A$3.8-million at the end of June, which would reduce its debt to A$22.1-million.
As part of the refinancing, Doray was also required to enter into additional gold hedging contracts by the end of June this year, to cover the extended loan term.