PERTH (miningweekly.com) – Gold developer Emerald Resources on Wednesday announced that it had secured a potential $160-million in funding to develop its Okvau gold project, in Cambodia.

The company has entered into an investment committee-approved term sheet with Sprott Private Resources to provide a $60-million facility that will be used towards financing of the project.

Further, Sprott has also offered Emerald an additional facility of up to $100-million to fund future project development and acquisition opportunities identified by the company, and agreed-upon with Sprott.

Emerald MD Morgan Hart told shareholders that the offer by Sprott to finance the development of the Okvau gold project followed a thorough technical due diligence process, which demonstrated the robust nature of the project and supported the company’s strategy of becoming the first modern large-scale Cambodian gold miner.

The Okvau project is expected to require a capital investment of $98-million to develop a two-million-tonne-a-year operation delivering about 106 000 oz of gold, over an initial mine life of seven years.

“We are also delighted with the conditional $100-million acquisition and development facility which may be utilised to create a pipeline of new projects for Emerald following the Okvau construction phase. Emerald and its experienced development team is excited to work with Sprott over the long-term to create a multi-asset gold producing company,” said Hart.

The $60-million facility will have a five-year term and an interest rate of 6.5% a year plus the greater of either a US dollar three-month London interbank offered rate or 2.5% a year, payable monthly.

The facility also included a gold price participation agreement, starting at the first gold production, with a gold price participation payment of 1 449 oz/m to a total of 62 307 oz.

The facility agreement remains subject to a number of conditions, including a legal due diligence, the execution of all material construction, supply and operating contracts, and the receipt of all the necessary shareholder and regulatory approvals, and the finalisation of a mineral investment agreement.

Hart said on Wednesday that the Okvau facility represented a significant milestone in the project path, allowing the company to achieve its strategy of first gold production next year.