NYSE American-listed Contango Ore has entered into an agreement with ING Capital and Macquarie to arrange a $70-million loan to fund its portion of the preproduction construction expenditures for the Peak Gold joint venture (JV), which is the owner of the Manh Choh gold project, in Alaska.
Contango is the 30% owner, and JV partner of a subsidiary of Canadian miner Kinross Gold, in the JV.
“We received very competitive terms for the senior loan facility and an attractive cost of capital for the company. Along with our upcoming equity raise, we will fully fund our obligation to the JV through production and execute on our other corporate objectives,” commented Contango president and CEO Rick van Nieuwenhuyse.
Construction of Manh Choh is under way and the project is on track with first gold production expected in 2024.
Van Nieuwenhuyse said that contracts had been entered into for contract mining with Kiewit, a global mining and construction contractor and Black Gold Transport, a local Alaska trucking company based in North Pole.
Capital costs are 90% committed and the project is on schedule and on budget.
According to Kinross' feasibility study for Manh Choh, aggregate capital expenditures for the JV to execute the development plan will be about $182-million, including $30-million for the purchase of the highway ore transport fleet.
Manh Choh is a high-grade, 8 g/t gold-equivalent openpit gold project. Run-of-mine ore will be transported from the mine site to Kinross’ already-operating Fort Knox processing facility near Fairbanks, Alaska.