JOHANNESBURG (miningweekly.com) - East Africa-focused gold-mining company Shanta Gold on Thursday said it had signed and drawn down a $30-million medium-term facility with First National Bank (FNB).
The facility, which is secured over the shares and business assets of Shanta Gold's Tanzanian subsidiary, Shanta Mining Company, would bear interest at a rate of Libor plus 8% a year, with a 2% arrangement fee. The facility is repayable over two years with a capital holiday for the first six months and repayment occurring over 18 equal monthly instalments thereafter.
The Aim-listed company announced in December that proceeds from the new facility would be partially used to cover the remaining monthly principal repayments of the outstanding loans that included $10-million with FNB and $5.3-million with US-based investment manager YA Global Master SPV.
The new financing, together with $35-million equity finance raised from the October placing of about 128-million Shanta new ordinary shares by London-based mining analysts Liberum Capital and the company's cash flow generated by its gold sales, provided it with the required cash headroom during the ramp-up phase of its New Luika mine, in Tanzania, which saw its first gold pour in August.
"We are pleased to have finalised and drawn down sufficient funds to provide the necessary headroom during the early stages in the production growth curve and to enter into this new phase in our banking relationship with FNB, which continues to show a strong commitment to the New Luika project," CEO Mike Houston stated.