In Brief: EnviroGold faces finance delay

ENVIROGOLD Ltd has become the latest Western Australian company to be caught in the global credit squeeze, announcing that “due to the current financial climate it will take longer than originally anticipated to close the financing for its 70 per cent-owned Las Lagunas gold project in the Dominican Republic”. In a statement, EnviroGold executive chairman Brian Johnson said the delay had become clear following recent discussions with its bankers. The company said it was still working with Standard Bank to pull the financing together and progress to drawdown. As a contingency, the company will investigate other sources of financing, including issuing either convertible notes or bonds to fund the project. Mr Johnson is confident financing will be forthcoming for the project as it was extremely robust at prevailing gold prices. In any event, the company has started negotiations to increase its shareholding in the Dominican project. Negotiations are also under way to buy a 2.5 per cent royalty stream to be paid by EnviroGold as vendor consideration for the purchase two years ago of a 20 per cent shareholding in Las Lagunas Limited, the project developer. In the meantime, engineering and equipment procurement is progressing, with major long lead plant items ordered. Earthworks for the plant site will commence within two weeks. -Staff reporters