Cardinal locks in $US25m funding deal

Cardinal Resources has secured a $US25 million ($33.7 million) credit facility with Canada-based asset manager Sprott Private Resource Lending, as the junior explorer progresses a feasibility study at its Namdini gold project in Ghana.

Under the agreement, Cardinal has a 30-month repayment term at an interest rate of the London interbank offer rate (LIBOR) plus 7.75 per cent.

Cardinal will also issue 4.3 million shares to Sprott, with the facility security against Cardinal’s assets.

Cardinal chief executive Archie Koimtsidis said the funding would progress its current feasibility study.

“This facility provides Cardinal with the ability to continue to fast-track Namdini towards completion of a definitive feasibility study, anticipated in the third quarter of 2019, while also maximizing shareholder value by avoiding unnecessary dilution,” he said.

“Importantly, the term of the facility is 30 months and therefore provides significant flexibility for the company as it continues to de-risk Namdini’s development.”

Sprott principal Dusan Petkovic said the company was pleased to have locked in the new credit facility.

“As one of the largest investors dedicated to the natural resource sector, Sprott is excited to continue its partnership with Cardinal,” he said.

“Our partnership with Cardinal is consistent with our strategy of providing innovative and flexible capital to maximize the value of exceptional projects.”

Shares in Cardinal were up 7.14 per cent at 45 cents each at 2pm AEDT.