CSM great newsThis is big relief! The rate is probably high, but the project economics will cover the cost. This is so much better than having to raise equity financing with the stock at the current level.
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Central Sun arranges $22.5-million (U.S.) Orosi loan
2008-09-10 12:50 ET - News Release
Mr. Peter Tagliamonte reports
CENTRAL SUN SIGNS INDICATIVE TERM SHEET FOR A TOTAL OF US$22.5 MILLION OF DEBT FUNDING
Central Sun Mining Inc. has signed an indicative term sheet for a total debt package of $22.5-million (U.S.) over a four-year term. Closing of the facility is subject to the bank's internal credit approval process, the conclusion of a satisfactory due diligence process, satisfactory definitive documentation and the obtaining of all the required regulatory approvals. The debt package is to be structured as a $20-million (U.S.) senior debt facility and a $2.5-million (U.S.) standby debt facility and will be secured by way of a first-ranking security interest over the Orosi project assets and corporate support from Central Sun until the project has reached its projected steady state of production. The senior debt facility will be used to finance the development, capital works and commissioning of the Orosi mine mill project. The standby debt facility will be available to finance up to 50 per cent of additional capital and/or operating costs to a maximum of $2.5-million (U.S.) with the company injecting a matching amount plus any remaining working capital which may be required. The company is aiming to have the debt package in place before the end of November, 2008.
Central Sun is currently converting the Orosi mine from a heap leach operation to a conventional milling operation. Based on extensive metallurgical testing, once the conversion is complete recoveries are anticipated to increase from 38 per cent previously being achieved from heap leaching to over 90 per cent with the new conventional milling. Commissioning of the new mill is expected in the first quarter of 2009 with production at a rate of approximately 85,000 ounces of gold per year. A positive feasibility study was completed in May, 2008, by Scott Wilson Roscoe Postle Associates Inc. The mill construction is progressing as planned and all permits required for production are in place.