JOHANNESBURG (miningweekly.com) – ASX-listed Doray Minerals has reached an agreement with Sandstorm Gold to terminate the metals purchase agreement over the Deflector gold project, which MD Allan Kelly said on Wednesday would simplify the financing process for the Western Australian project.
Sandstorm previously loaned $6-million to Mutiny Gold, which had the option to repay the loan, plus interest, by April 16, 2015, or to convert the loan to a metals purchase agreement where it would sell 2.6% of gold production from Deflector to Sandstorm at $500/oz for the life of the mine. The loan repayment date was extended to October 16, 2015, as part of Doray’s October 2014 takeover offer for Mutiny.
In return for Doray agreeing to repay the loan early, Sandstorm had agreed to a reduced payout figure of $7-million, compared with the current balance of $7.8-million. Repayment of the loan terminates any and all rights related to the metal stream over Deflector.
“Since completing the takeover of Mutiny around two months ago, Doray has appointed a debt adviser, commenced discussions with a number of banks and potential off-take partners and completed a detailed internal review of the project. We are now working towards finalising the funding for the project to allow site works to commence on schedule,” Kelly said in a statement.
Westpac had agreed, in principle, to fund the repayment to Sandstorm by increasing the current project finance facility over Andy Well, with the loan term extended by two quarters to December 2016.