Serabi Gold Secures $8 Million Loan Facility with Sprott Resource

Serabi Gold (TSX:SBI,AIM:SRB) announced it has entered into an $8 million secured loan facility arrangement with Sprott Resource Lending Partnership. The funding will be used to provide additional funding for the continued development of the Palito Mine and the Sao Chico gold project.

According to the press release:

The Facility is for a term expiring on 31 December 2015 and carries interest at a rate of 10% per annum. The Facility will be used to provide additional funding for the continued development of the Palito Mine and the Sao Chico gold project, to finance an additional drilling programme at Sao Chico and for general corporate purposes.

The Facility is subject to a number of conditions precedent, including execution of security documentation in favour of Sprott over the assets of the Group, and may be drawn down in up to three tranches with the first Tranche of US$3 million having been released on 26 September 2014 concurrent with the closing of the transaction. The second and third tranches will be available until 31 December 2014 and drawdown will be subject to Serabi’s on-going compliance with the terms of the Facility and the completion of the registration of all the security arrangements subjects to Sprott’s right to waive in whole or part any such requirement at any time.

Mike Hodgson, CEO, said:

I view the decision by Sprott to provide a loan facility to Serabi, as a significant endorsement of the achievements we have made and will continue to make at Palito, and our ability to continue to increase production during the rest of 2014. With the on-going development of the Sao Chico project, this production growth can be expected to continue through 2015. The additional working capital that this facility provides will give the Group additional flexibility in executing its development plans.

Click here to read the Serabi Gold plc (TSX:SBI,AIM:SRB) press release