PERTH (miningweekly.com) – ASX-listed explorer Bulletin Resources has inked a mandate letter with the Commonwealth Bank of Australia (CBA) to arrange for funding for the Nicholsons gold project, in Western Australia.

The funding proposal mandated the CBA to complete a senior secured gold prepaid forward and mandatory hedge facility, allowing Bulletin to contribute to its interest in the refurbishment and development of the Nicholsons gold project.

The facility would likely be worth about A$2.3-million, based on Bulletin’s 20% interest in the Nicholsons project.

“Bulletin is very pleased to be able to secure a funding proposal from the CBA on attractive terms. The timing of this financing deal is particularly pleasing given the recent increase in the Australian dollar gold price,” said Bulletin chairperson Paul Poli.

Bulletin currently holds a 35% interest in the project, with project partner Pacific Niuigini holding the remaining 65%, and moving towards an 80% interest.

In December of last year, Bulletin struck a deal with Pacific Niugini to assist in the hunt for financing to develop the Nicholsons project, under which Pacific Niugini would assist Bulletin in securing the financing requirements for the Nicholsons project, and to extend the same financing terms to Bulletin.

As part of the proposal, Bulletin would be required to fund its share of the project equity, equating to some A$700 000, and the company said on Friday that it was currently considering its options for meeting this equity share.

“Both parties are moving to finalise an agreement on the terms previously announced and are acting in good faith. This financing facility certainly enables Bulletin to enter the production phase fully maintaining its 20% equity in the project,” said Poli.

The project was expected to have an initial mine life of four-and-a-half years, and would deliver a net profit after tax of A$50-million, a net present value of A$42-million and an internal rate of return of 162%.