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Alcyone secures A$10m in funding

17th May 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed silver miner Alcyone Resources has secured A$10-million in funding through a proposed metal stream agreement.

The investment proposal provided for a metal stream of 15% of the life-of-mine production of silver ounces from Alcyone’s Texas, Twin Hills and Mt Gunyan projects, as well as the right to purchase this metal stream at a price per ounce equalling the lesser of $6.50/oz or 80% of the prevailing market price.

Concurrent with the metal stream purchase, the proposal also provided for future investment, at a premium to market prices, through the issue of some 200-million options at a 50% premium to the current 30-day volume-weighted average price in the period immediately prior to the issue of options.

Alcyone chairperson Paul Sylva said on Friday that the proposed agreement allowed Alcyone to realise substantial value from the future expected output of the Texas silver project, and would provide extra funds to support the company’s turnaround strategy.

“This potential investment, alongside the proposed equity raising, will place us on a much stronger financial footing,” he said.

In April this year, the company announced that it would raise some A$14-million through a rights issue to recapitalize its balance sheet.

Sylva said that the metal stream proposal secured the first leg of the company’s strategy to create a simplified and robust financial structure to support future production.

“We will now work with our financier to move to a final binding agreement on mutually acceptable terms.”

The Texas silver project started production in 2011, and was currently ramping-up to an annualised production level of one-million ounces of silver a year. Alcyone has launched an aggressive exploration programme to establish a seven- to ten-year mine-life at the project.

Edited by Creamer Media Reporter

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