Torex Gold Resources (TSX:TXG, Stock Forum), a Toronto-based firm engaged in the exploration and development of precious metal resources with a focus on gold, announced today that the company had signed a binding letter of agreement with Bank of Montreal, BNP Paribas, Commonwealth Bank of Australia, ING Bank N.V., Société Générale, and the Bank of Nova Scotia for a proposed US$375.0 million 8.25-year senior secured project finance facility.
According to the news release, the company will use the proceeds from the transaction to develop the El Limon – Guajes Project on the company's wholly-owned Morelos Gold Property located in Mexico.
The Loan facility is comprised of two parts, a project finance facility (“PFF”) of $US300.0 million and a cost overrun facility (“COF”) of US$75.0 million with all advances of the PFF carrying interest at a rate of LIBOR + 4.25% to 4.75% and COF advances bearing interest at the same rate plus an addition of up to 3%.
The lenders have yet to complete due diligence on the company's Environmental and Social Impact Assessment (“ESIA”) which is expected to be finished in early May.
Company president and CEO, Fred Stanford, commented, “We are pleased to be able to announce that once the Loan Facility has closed, the Project will be fully financed; based on the current expectation that the ESIA will not require any material, non-budgeted capital expenditures.”
He went on to illustrate, “The journey to get to this point has been long and thorough and we appreciate the patience and support of our Shareholders as this process unfolded and delivered an excellent result. The significant commitment from six global mining banks is a strong endorsement of the Project and our team.”
The he added, “Looking to the future, we anticipate furthering the excellent relationship that has been developed with the Banks. The entire Torex team intends to fully deliver the project commitments and reward the confidence that the Banks and our Shareholders have shown in us.”
And finally concluded, “The 21-month construction of our mine started in November and is progressing full speed ahead, slightly under budget and, in some areas, ahead of schedule. The permit approvals to proceed with the village relocation and eastern service road were recently received, construction has now commenced on all areas of the project.”
Torex was in the news recently when the company announced the appointment of a new CFO in the middle of March.
Shares gained 8.00% on the news to $1.06 per share.
Currently there are 726.3m outstanding shares with a market cap $769.9 million.