Photo by: Bloomberg
PERTH (miningweekly.com) – Gold developer GBM Resources has entered into a A$10-million loan agreement to advance the redevelopment of its Mt Coolon gold project, in Queensland.
Under the terms of the agreement with UK-based National Federal Capital, the first tranche of A$5-million will be paid before November 21, with the second tranche due by February 28, 2017.
The first tranche loan will be repaid by the delivery of 6 057 oz of gold, in equal instalments over four quarters, starting at the end of November 2018.
The second tranche loan will be repaid in cash in equal instalments of A$2.5-million per quarter, starting at the end of March 2019.
The loan is interest free, but is subject to the completion of a due diligence before November 21.
A previous scoping study into the Eugenia deposit, at Mt Coolan, demonstrated that a 16-month small-scale heap-leach operation had the potential to generate a strong positive cash flow, with recovered gold ounces totalling 32 588 oz at a C1 cost of $848/oz. Capital is estimated at $8.3-million.
The Eugenia heap leach is one of three near-term gold production scenarios at Mt Coolon currently under review, estimated to contain a total of 315 000 oz of gold.