Gascoyne locks in $60m debt facility

West Perth-based Gascoyne Resources has secured a $60 million debt facility with two major Australian banks as it aims for its Dalgaranga gold project to be in production in mid-2018.

Commonwealth Bank of Australia and National Australia Bank have agreed to a 50-50 loan with a four-and-a-half-year term that included a hedging facility.

The hedging facility included 164,000 ounces of mandatory hedging already completed to take advantage of the favourable gold price.

Gascoyne did not reveal an interest rate but said the agreement had industry standard terms and conditions for a facility of this type.

The Dalgaranga project has an initial mine life of six years and an average output of around 100,000oz per annum.

Managing director Michael Dunbar said production at Dalgaranga was scheduled for the second quarter of next year.

“Finalising the debt facility with two tier 1 Australian lenders, CBA and NAB, for the debt funding is major step forward for the development of the Dalgaranga gold project and significantly de-risks the project,” he said

“The terms we have negotiated highlight the quality of the project and represents a strong vote of confidence in the project and the work undertaken by the Gascoyne team since we finished the feasibility study in November last year.”

The debt facility agreement follows on from a $21 million capital raising for the Dalgaranga project last month.

Shares in Gascoyne were up 3.7 per cent at 42 cents at 2pm AEDT.