PERTH (miningweekly.com) – Junior gold miner Minera Gold has entered into a $5-million gold streaming agreement with precious metals streaming company SilverStream.

The gold stream agreement covered the Torrecillas gold project and its surrounding concessions, in Peru. The $5-million payment would be provided over four installments, with the first $1.6-million due on the signing of the agreement.

The following $1.4-million payment would be made once two consecutive months of 1 000 oz or more of production had been reached, at a cash cost of less than $1 300, while a further $1-million payment would be made on achieving three consecutive months of production of 1 600 oz or more, at a cash cost of less than $1 300.

The final $1-million payment would be made on achieving three consecutive months of 2 000 oz of production, at a cash cost of less than $1 300.

“This deal, along with the recently announced convertible loan extension, represents a completion of the funding needed to finalise the recapitalization of Minera Gold’s balance sheet, accelerate the reduction in term debt owed to Anglo Pacific Group and also provide continued expansion funding to the Torrecillas gold project,” said Minera CEO and MD Ashley Pattison.

He noted that the agreement with SilverStream was also an endorsement of the Torrecillas gold project, adding that the terms of the deal validated the quality and the upside potential of the asset.

With the investment, SilverStream would be entitled to nominate a nonexecutive director to the Minera board.

Furthermore, Minera has agreed to deliver the greater of 70 oz or 10% of its monthly production to SilverStream for the life-of-mine, with SilverStream paying the lower of $400/oz or 80% of the spot gold price on the date of delivery.

Minera has been undertaking trial mining at Torrecillas for the last three years, and the project was currently being ramped up towards commercial production. Earlier this year, the company signed a three-year ore processing agreement with a private Peruvian entity at the San Santiago plant, some 185 km from the Torrecillas project.