Guyana Goldfields today announced that it has signed an agreement with a consortium of lenders for US$185M which means its gold mining project in the Cuyuni area is now fully financed.
In a statement, Guyana Goldfields says it clinched a common terms agreement for the Aurora mine with the International Finance Corporation, the private sector arm of the World Bank; Export Development Canada; ING Capital LLC; Caterpillar Financial Services Corporation and The Bank of Nova Scotia for the US$185 Million project finance facility.
“With the completion of the Facility, the development of the Project is now fully financed, subject to the terms and conditions of the Facility”, the statement said.
The Project Loan Facility will comprise two tranches; a Tranche 1 facility of US$160M and a Tranche 2 cost overrun facility of US$25M. The maximum term of the Facility is eight years and advances under the Facility will carry a weighted average interest rate of 3-month LIBOR plus 5.11% for Tranche 1 facility, and advances under the Tranche 2 facility would bear interest at the same average range of rates plus 0.5% (if drawn). The release said that there will be no gold hedging requirements or other similar provisions associated with the Facility.
As a condition of first disbursement, the Company is required to fund an additional US$33M which has been satisfied through a fully-subscribed, non-brokered private placement offering. Management currently expects to obtain first drawdown of the Facility in September of this year.
Last month, Guyana Goldfields said it was on track to commence mining in Aurora, Cuyuni by July 2015. This was related to President Donald Ramotar when he and a delegation toured the Canadian company’s mining project. The company’s Chief Executive Officer, Scott Caldwell also told Ramotar, who made the trip with Canadian High Commissioner to Guyana Nicole Giles, Natural Resources Minister Robert Persaud, Works Minister Robeson Benn, Finance Minister Dr Ashni Singh and GGMC Chairman Clinton Williams that the company expects to produce 14,000 to 15,000 ounces of gold per month.
The company announced last December that it had secured the US$238 million in capital costs needed to take the Aurora project towards the commercial production phase.
Once completed, the mine is expected to produce 3.3 million ounces of gold over its initial 17-year life-span, and operate at a cash cost of US$527 per ounce.
The project’s facilities include the construction of a wharf at Buckhall on the Essequibo River in Region One, the access road from Buckhall to the project site, crossings, and work on the quarry. It is estimated that over eleven hundred Guyanese have been involved in the exploration, pre-development and development up to early 2014. As the project rolls into commercial production in 2015, 400 to 500 Guyanese are expected to be included in its operations.