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TomaGold Corporation (TSXV:LOT) has signed an agreement with Gold Reef Mining LLC, under the terms of which TomaGold will provide a US$750,000 secured loan to put the Gold Reef Mine into production. Gold Reef is operator of the mine, and currently has a 3,000 ton per month purchase contract with Freeport-McMoRan Miami Inc.
TomaGold Corporation (TSXV:LOT) has signed an agreement with Gold Reef Mining LLC, under the terms of which TomaGold will provide a US$750,000 secured loan to put the Gold Reef Mine into production. Gold Reef is operator of the mine, and currently has a 3,000 ton per month purchase contract with Freeport-McMoRan Miami Inc.
As quoted in the publication:
Having a term of one year and bearing interest at 10% per year, this transaction will allow having a carried interest of 25% of the cash flow generated by the Mine. The carried interest will remain after the Loan has been reimbursed, namely for the full duration of the Mine.
Following the Closing of the proposed transaction, TomaGold will hold an irrevocable and absolute option to acquire 50% of the ownership property of the Mine for US $2 million in capital expenditures on the project. TomaGold may exercise its option in the interest within 48 months following the full reimbursement of the Loan.
TomaGold president and CEO, David Grondin, said:
This is a major step forward for TomaGold, both bringing us closer to achieving our goal of becoming a gold producer and bringing strong financial partners into the fold. The Gold Reef project will enable us to generate cash flow in the coming year, and the US$4 million financing will allow us to finance this first transaction along with other similar transactions that the management of the Company has been working on over the last year, with minimal dilution for our shareholders. With gold assets at their lowest valuation, we believe this is a great time to acquire high quality gold assets.
Click here to read the TomaGold Corporation (TSXV:LOT) press release