06/12/2017 - 14:15

Kin secures $35m debt facility

06/12/2017 - 14:15

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Aspiring gold miner KIN Mining has signed a binding term sheet for a $35 million debt package with Canada-based Sprott Private Resource Lending.

Kin secures $35m debt facility
Kin Mining purchased the Lawlers processing plant from Gold Fields earlier this year.

Aspiring gold miner KIN Mining has signed a binding term sheet for a $35 million debt package with Canada-based Sprott Private Resource Lending.

The three-year agreement will support development of the company’s Leonora gold project in the Goldfields region, which is expected to be in production in the second half of next year.

Under the agreement the first repayment will occur 18 months after the first drawdown.

The debt carries an interest rate of 8 per cent plus the greater of ($US) 12-month LIBOR (London Interbank Offered Rate), or 1 per cent.

Managing director Don Harper said the debt facility would allow the company to develop the company’s flagship gold project.

Kin plans to spend $35.4 million on development of the project, with the lion’s share of that to be used on upgrading and relocating the Lawlers processing plant, which it purchased from South African company Gold Fields earlier this year.

The 800,000 tonnes per annum plant is currently located about 160 kilometres north-west of the Leonora project.

Kin plans to upgrade and refurbish the facility to 1.5mtpa through the installation of a refurbished 2.5-megawatt ball mill, which it bought from Macca-Interquip in August, along with six new carbon-in-leach tanks.

It also plans to move the processing facility closer to the Leonora project, at the Cardinia mining centre.

Kin will issue 3.5 million shares to Sprott as part of the agreement, with the shares to be escrowed for four months, and a 1.5 per cent net smelter royalty on the first 100,000 ounces of gold produced at the mine.

There is no hedging requirement, no cash flow sweep and no cost overrun facility.

Shares in Kin finished flat at 32 cents each.  

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