JOHANNESBURG (miningweekly.com) – Gold producer Troy Resources has satisfied the conditions precedent to access A$20-million of a A$40-million corporate loan facility with Investec Bank Australia.

The ASX- and TSX-listed company said in a statement that A$20-million of the revolving corporate loan facility (RCF) was now available for drawdown, while the remaining A$20-million revolving acquisition facility (ALF) would be available for drawdown once Troy had removed any conditions relating to its acquisition of Azimuth Resources.

The RCF had a term of three years and would provide funding for general corporate and working capital purposes, while the ALF had a term of 18 months. Neither facility would require gold or silver price hedging.

“These new facilities will not only give Troy tremendous flexibility over the next few years, but will also provide a degree of comfort and certainty, which is invaluable in these volatile markets,” MD Paul Benson commented.

The company would leverage the ALF to assist with the costs associated with the acquisition of Azimuth and ongoing work associated with completing the prefeasibility study of Azimuth’s West Omai deposit.

“The ALF will allow us to accelerate activities at the West Omai project and also puts us in a strong position to acquire second-hand plant suitable for the mine’s development, which is part of Troy’s successful strategy for minimising mine development capital,” Benson said.

Troy announced its off-market share-trade takeover offer of fellow gold miner Azimuth at the end of March, offering one of its owns shares for every 5.695 Azimuth shares held. This would see Troy shareholders holding 55% of the combined company.
Meanwhile, as part consideration for the provision of the loan facilities, Troy had issued 1.36-million call options over Troy ordinary shares with an exercise price of A$3.67, expiring on June 26.

The company had also agreed to provide Investec with first right of refusal to provide future financings, subject to competitive terms.

Investec had already provided A$35-million in loan funding in 2010 to assist with construction of Troy’s Casposo project.