PERTH (miningweekly.com) – Diversified junior Cleveland Mining has secured a $6.8-million convertible note facility to expand and optimise operations at the Premier gold mine, in Brazil.
The funds were sourced from a New York-based resource focused fund and would have an 18-month term. The loan note would be repayable at Cleveland’s call, at any time during the facility term.
The funds would be used to consolidate existing operations and expand production at Premier.
“This facility will transform Cleveland and enable management to immediately develop the business under the low-cost owner/operator model initiated mid last year,” said Cleveland MD David Mendelawitz.
“Along with boosting our processing capabilities with the new circuit, we intend to use the funds to further grow our resource base and mine life,” he added.
Cleveland was currently targeting a throughput rate of some 25 t/h at the Premier circuit, or some 15 000 t/m, and was hoping to install a larger second ball mill to reach a 30 000 t/m capacity.
Mendelawitz said that the decision to debt-fund rather than equity fund the next development stage reflected the company’s confidence in the underlying business and cash flow capacity.
“While we have been happy to equity fund the operation to date, and also to support our joint venture partner through this process, the comparable cost of capital for an equity raise of this quantum, at this time, would have been considered an inferior outcome for shareholders.”