09/11/2009 - 10:31

Regis unchanged after $45m debt facility

09/11/2009 - 10:31

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Shares in West Perth-based Regis Resources remained steady in trading today following the announcement of a $45 million debt facitlity the company will use to develop its $73 million Duketon gold project.

Shares in West Perth-based Regis Resources remained steady in trading today following the announcement of a $45 million debt facitlity the company will use to develop its $73 million Duketon gold project.

A formal credit-approved offer from Macquarie Bank Limited (Macquarie) included a project loan, gold hedging and performance bond facilities for the Duketon Gold Project (DGP).

The debt facility will be provided in two tranches, the first for $40 million and the second for $5 million.

Regis will now also proceed with an equity issue to complete the funding of the development cost of the DGP along with exploration costs and working capital requirements.

Regis managing director, Mark Clark said his company had secured very competitive debt financing terms for the development of the Duketon Gold Project.

"This is a reflection of Macquarie's confidence in both the Regis management team and the robustness of the Duketon Gold Project," Mr Clark said in a statement.

"The negotiation of the debt facility, along with the imminent completion of the equity issue, marks the start of Regis' long awaited transition from explorer to gold producer."

At 1225 AEDT shares in Regis remained unchanged at 52 cents.

 

Full announcement below:

DUKETON GOLD PROJECT - FINANCING FACILITY
The board of Regis Resources Ltd is pleased to advise that, following a competitive tender process and resolution of the position of Newmont's secured guarantee, it has accepted a formal credit-approved offer from Macquarie Bank Limited (Macquarie) for project loan, gold hedging and performance bond facilities for the Duketon Gold Project.

The key features of the facilities are as follows:
- Debt facility of $45 million.
- Hedging facility of up to 300,000 ounces of gold.
- Performance bond facility of $5 million.

The debt facility will be applied towards the development cost of the Duketon Gold Project (DGP) which is forecast at $73 million. It is not expected that drawdown of the debt facility will be required until the March 2010 quarter. The development of the DGP is on schedule for commissioning and first gold production in the September 2010 quarter.

The debt facility will be provided in two tranches, the first for $40 million and the second for $5 million. Tranche two is effectively a standby facility. The loan amortisation schedule requires full repayment of the debt facility by June 2014 however the board anticipates earlier repayment.

The gold hedging facility will be available to the Company on execution of security documentation and satisfaction of a limited number of the facility conditions precedent.

Drawdown of the loan facility is subject to usual conditions precedent including the completion of a gold hedging programme of 150,000 ounces. Gold reserves at the DGP are currently 603,584 ounces.

The facilities have been provided on very competitive terms, are lightly covenanted and there are no equity participation rights in relation to the facilities.

Regis will now also proceed with an equity issue to complete the funding of the development cost of the DGP along with exploration costs and working capital requirements. The structure and timing of the equity issue will be advised to the market shortly.

Regis Managing Director, Mark Clark commented:
"The Company has been able to negotiate very competitive debt financing terms for the development of the Duketon Gold Project. This is a reflection of Macquarie's confidence in both the Regis management team and the robustness of the Duketon Gold Project. The negotiation of the debt facility, along with the imminent completion of the equity issue, marks the start of Regis' long awaited transition from explorer to gold producer."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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