Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed gold hopeful Sumatra Copper & Gold has secured a $45-million senior debt facility to fund the commercial development of its Tembang project, in Indonesia.
The three-year facility would have an interest rate of 7.5%, increasing to 10% after 18 months, with a redemption premium at the end of the loan period.
Up to 250.59-million warrants would be convertible into one Chess depository interest in the company, exercisable at a price of 5.7c each, with the three-year term on the warrant, from the drawdown date.
The facility would be drawn down in a lump sum, and some 85% of the cash generated from Tembang would be used to repay the facility each quarter. Interest would be paid quarterly.
Furthermore, Sumatra would enter into a hedging agreement with lead arrangers Nomura Singapore for gold hedge after the drawdown.
Sumatra would also be required to raise $5-million in equity within six months of the drawdown.
The ASX-listed company said on Friday that the facility would be subject to shareholder approval.
The recently updated definitive feasibility study on Tembang forecast a total production of 168 794 oz of gold and about 1.8-million ounces of silver, at a processing rate of 400 000 t/y. The project is expected to produce about 33 000 oz/y of gold and 345 000 oz/y of silver, at a cash operating cost of $470/oz.
The total capital cost of Tembang is estimated at $71.3-million. First production is targeted for mid-2015.