JOHANNESBURG (miningweekly.com) – East Africa-focused gold producer Shanta Gold has received an advanced payment of $5.25-million as part of a silver streaming agreement (SSA) with privately held Guernsey-based investment company Silverback.
The SSA was signed in May.
In addition to the advance payment, Silverback will pay Shanta 10% of the value of silver sold at the prevailing silver price at the time of deliveries.
The SSA relates solely to silver by-product production from Shanta’s New Luika gold mine, in Tanzania, with minimum silver delivery obligations of 608 970 oz over a 6.75-year period.
The SSA will expire after ten years and there are no minimum ounce obligations after 2022.
The SSA will be secured against Shanta’s three Tanzania-based Singida gold project mining licences and the company is putting the necessary arrangements in place with private bank Investec to facilitate this.
The security amortises over the 6.75 years of the silver deliveries and automatically subordinates should Shanta raise a minimum $6-million of project finance for Singida’s development.
Shanta produced 121 682 oz of silver in 2015, representing 2% of yearly revenue.