Australian gold firm Troy Resources Limited will have to obtain political risk insurance before it is able to access another tranche of a loan to develop its gold mine at Kaburi in Region Seven.
In a statement, the company announced that it has received notification from Investec Bank Plc that “Tranche B” of the A$100 million Revolving Corporate Facility (RCF) announced in April this year has been approved by Investec’s Credit Committee. Tranche B comprises funding of A$30 million (approximately US$24.7 million) for the construction and development of Troy’s Karouni Project in Guyana and is in addition to the A$70 million (US$57.7 million) previously provided in “Tranche A,” the company said.
It said that the approval follows the conclusion of a successful visit to Troy’s Casposo mine in Argentina and to Karouni by a team of technical and financial representatives from Investec. The conditions to the availability of Tranche B include political risk insurance in relation to the company’s Guyanese assets.
Other conditions are the granting of 10,000,000 call options over ordinary shares in Troy with an exercise price of $0.80 and a three-year term. These call options will replace any call options that have been issued to Investec to date in relation to Tranche A of the RCF, the statement said. Other conditions are a rolling 12 month hedging programme of 100,000 ounces and satisfactory confirmation that all licences and governmental approvals to operate and run Karouni have been received.
The company has moved to fulfil these requirements and is actively engaged with the relevant authorities to progress the necessary licences required to operate and run Karouni, the statement said.
Documentation has commenced to incorporate the revised terms for Tranche B into the RCF. In addition to Tranche B, Investec has also offered the company a revolving Working Capital Facility (WCF) up to an amount of A$15 million. Under the terms of the WCF, the company, at its nomination, has the option of repaying any funds drawn through either the payment of cash or issuing of shares. The WCF will be made available until 30 June 2017, the statement said.
The Karouni project marks the first entry into Guyana by Troy Resources Limited through its wholly owned subsidiary, Troy Resources Guyana Inc (TRGI). Troy’s other projects are located in Para State in Brazil and San Juan State in Argentina. All are focused on gold with the addition of silver in Argentina.
TRGI has proposed a medium-scale gold mine designed to produce up to 110,000 ounces of gold per annum based on an average overall recovery of 92% at the Black Water Creek, Kaburi Area, in Region Seven. The mine will be focused on the recovery of ore for processing from Smarts and Hicks gold deposits. The project components include an open cut mine, processing plant, tailings storage facility, mine site accommodation and additional infrastructure required to recover and to process ore for the recovery of gold.