A gold loan, amounting to 47,731 oz., has been granted to Nixon Fork Mining, subsidiary of Consolidated Nevada Goldfields (TSE), for its new Alaskan mine.
The 27-month loan has a dollar value of US$18.7 million based on a fixed price of US$392.30 per oz, and bears an interest at the gold lending rate plus 3.5%.
For providing the loan, Internationale Nederlanden Capital (ING) will also receive a 1.5% interest in the mine’s net smelter revenues.
From the proceeds of the gold loan, US$5.4 million will be used to pay Citibank Australia for a term loan and bridge loan used as interim funding for construction costs.
As part of the financing, ING has included a 42,269-oz. gold-hedging facility which will provide a sales price in excess of US$400 per oz. This replaces a 39,000-oz. forward sales agreement with Citibank Australia with an average price of US$375 per oz.
Exploration continues in Nevada at the company’s Aurora gold mine. Drill holes into the newly discovered Martinez deposit have encountered vein and stockwork mineralization over 550 ft. of its 1,400-ft. strike length. The deposit is still open at depth.
Before the latest round of drilling, the company announced a drilled geologic resource for the Martinez of 1.26 million tons grading 0.06 oz. of gold per ton, or about 75,000 contained oz. Promising new results should significantly change the estimated resource.
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