Chieftain Now Able to Fund Feasibility Study Update

Chieftain Metals Corp. (TSX:CFB) announced yesterday that its subsidiary, Chieftain Metals Inc., has accepted a term sheet for a “secured and syndicated loan facility” with West Face Capital Inc. as agent for West Face Long Term Opportunities Global Master LP. It will be made available in two tranches.

As quoted in the press release:

Proceeds from the first tranche in the amount of $7.5 million will be used to update the Company’s 2012 feasibility study (the ‘Feasibility Update’) relating to the construction of a mine at the Tulsequah Chief orebody (the ‘Project’) and for general corporate purposes. The first tranche will be issued at 98% of the principal amount.

The second tranche provides the Company the ability to draw the Canadian dollar equivalent of US$10 million, if needed, to repay amounts owing under the silver and gold purchase agreement dated as of December 22, 2011 (the ‘Streaming Agreement’) with a subsidiary of Royal Gold, Inc. (‘Royal Gold’) in the event the Company and Royal Gold cannot reach an agreement to extend or modify the terms of the Streaming Agreement.

Victor Wyprysky, president and CEO of Chieftain, commented:

We are pleased to announce this financing which will provide us with the necessary funding to complete the Feasibility Update, cover operating costs through 2015 and satisfy potential obligations under the Streaming Agreement. We expect that the Feasibility Update will reflect lower capital costs, resulting in enhanced projected investment returns and will greatly improve the project’s financeability.

Click here to read the full Chieftain Metals Corp. (TSX:CFB) press release.

Click here to view Zinc Investing News’ interview with Chieftain.