Troy lines up $100m credit facility

Gold miner Troy Resources says it has secured the final funding required to develop its Karouni project in West Guyana, with Investec Bank agreeing to provide the company with a $100 million revolving credit facility.

Troy said $70 million of the facility had been credit approved, with the remaining $30 million to become available to the company upon meeting development milestones.

The company expects the $70 million currently available to it, along with operating cashflow and about $54 million in existing cash reserves, will be enough to fund construction of the Karouni project and bring it to production.

Troy chief executive Paul Benson said $40 million of the funding would refinance existing borrowings, with only $30 million of the facility considered new debt capacity.

Mr Benson said the additional funding available to the company upon further development of the Karouni project would provide flexibility to recommence brownfields exploration at other sites.

"The remaining $30 million of the facility, which will be available subject to satisfactory progress with development of the Karouni project and Investec credit approval, we see as back-up at this stage and gives us flexibility to consider other opportunities," he said.

"Equally important from my perspective, the facility also enables us to utilise operating cashflows to recommence brownfields exploration at both Karouni and Casposo where we believe we have excellent potential to add to the resource inventory."

Troy has agreed to grant Investec 3.3 million call options over its shares to the value of $5 million. 

The credit facility will have a three-year term with semi-annual repayments commencing in June 2015.

Troy may also be required to put in a hedge program prior to drawing down on the facility.

The company said it had proposed hedging 1.6 million ounces of silver and would consider hedging gold production depending on market conditions.

Its shares were trading 1.5 cents higher at 95 cents at 12:01pm WST.