The Company advises that it has entered into an agreement under which it will borrow $10 million from a private investor, Capri Trading Pty Ltd, primarily to fund capital and operating initiatives at the Mineral Hill Mine, in central New South Wales.
The loan funds will enable:
- Completion of the underground development of the Red Terror Ore bodies to establish stoping blocks for higher grade copper-gold ore production;
- Commencement of construction of a gold plant;
- Initial stripping of the open cut for Pearse gold silver project; and
- Repayment of the remaining principal and interest under the $3 million bridge loan facility established in December 2012.
The gold plant will enable higher recoveries of gold from underground copper/gold ore and the production of gold/silver doré (bullion) from the Pearse open cut mine.
The loan has a two year term. No interest payments are required during the term and the repayment amount is $11.3 million if repaid before the first anniversary of the loan and otherwise $12.6 million to be repaid before the second anniversary of the loan (Repayment Date). The lender will also be issued with 44 million options each exercisable at 11 cents up to the 5th anniversary of the Repayment Date. The loan will be secured over the Mineral Hill mine and certain other assets. It is expected the loan will be drawn down during March 2013.
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