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Sutter Gold Mining Inc. (TSXV:SGM,OTCQX:SGMNF) provided a corporate update. The Company has implemented several cost-cutting measures including changes to management, reduction of mine-site workforce, and refined the Lincoln Project development plan.
As quoted in the press release:
RMB Australia Holdings Limited (“RMB” or the “Lender”), which has funded development and construction costs at Sutter’s Lincoln Mine Project in the California Mother Lode for the past five years and continues to do so, requested cost reductions as a condition of further funding under the extension and increase of the bridge loan announced on May 23, 2013. An affiliate of RMB is also a 48% shareholder of Sutter Gold’s common shares.
Mr. Richard A. Winters, President of RMB Resources Inc. and a Director of Sutter since July 2008, has been appointed Interim President and CEO. RMB Resources, the wholly-owned resource merchant banking division of the FirstRand Group of South Africa, provides equity and debt financing to small and mid-sized resource companies globally outside South Africa.
Approximately one-third of the current staff positions have been eliminated at the Lincoln Mine site. The remaining personnel will continue with execution of the next phase of planned development at the Project.
In concert with the Company’s cost cutting efforts, RMB has agreed to reduce the interest rate on the existing Secured, Short Term Credit Facility (see press release of May 23, 2012). Beginning July 1, 2013, the interest rate on the Facility will be reduced from Libor plus 15%p.a. to Libor plus 10%p.a. This measure will reduce interest burden and direct increased funding for the next phase of development at the Lincoln Project.
As a result of these actions, RMB has agreed to continue funding the next phase of development at the Lincoln Project. This phase of work involves final close out of the outstanding building permits on the surface facilities, including the administration and shop building, mill, sand barn and tailings thickener. The mill, currently 95% complete, will be completed and commissioned with the processing of approximately 1,500 tons of mined material currently stockpiled at the mill and 1,500 tons of new mined material forecast to be produced from continuing underground development. Revenues generated from the mill commissioning will be used to partially offset ongoing development costs.
Click here to read the Sutter Gold Mining Inc. (TSXV:SGM,OTCQX:SGMNF) press release
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