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RNI extends and increases finance facility

31st January 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed Resources and Investment (RNI) has increased and extended its finance facility with Taurus Resources No 2 Fund to pursue its gold production plans.

The original A$15-million Taurus facility has now been increased to A$19.5-million, and the date for repayment has been extended by 12 months, to February next year, RNI said on Friday.

The company said that the facility had enabled it to exercise an option to acquire the Peak Hill gold mine from fellow-listed Montezuma Mining Company. The Peak Hill project is adjacent to RNI’s own Grosvenor gold project, in Western Australia, and gave the company a combined gold inventory of about two-million ounces.

RNI chairperson Miles Kennedy said that the A$19.5-million funding facility represented a strong show of faith by Taurus in RNI’s plans to pursue a low-cost gold production pathway, adding that the company had advanced negotiations with a number of parties regarding the final project financing package to enable Grosvenor and Peak Hill to be developed.

“The extended Taurus facility will enable us to continue advancing our gold production feasibility studies at Grosvenor and Peak Hill, where we remain confident of achieving cash production costs of less than A$1/oz,” Kennedy said.

He said that in addition, the Peak Hill transaction had enabled RNI to entrench its position as the dominant tenement holder in Western Australia’s Bryah basin, which has been underlined by the recent moves by other miners to secure a spot in the region.

Under the terms of the Peak Hill agreement, RNI would pay Montezuma some A$2.8-million in cash along with 8.4-million fully paid ordinary shares, as well as 2.1-million unlisted options, exercisable at a price of 35c each.

RNI would also pay Montezuma a 1% gross royalty, capped at A$1-million, on all revenue received from Peak Hill production.

Edited by Creamer Media Reporter

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