Crater Gold Mining has secured a $4 million unsecured loan facility that will enable it to advance its flagship Crater Mountain Gold Project in Papua New Guinea. The funds are being loaned by one of the company’s major shareholders, Freefire Technology.
Crater Gold intends to recommence exploration, including drilling, at the project and to restart mining operations at the High Grade Zone (HGZ).
Funds will also support exploration activities at the company’s North Queensland polymetallic and graphite projects.
The first $1 million in funding is available at the option of the company, with the balance of $3 million requiring the consent of Freefire prior to a draw down request being executed.
Managing director Russ Parker said: “We are pleased to announce this new funding for the company from our long-time supporter and financier Freefire which enables us to move confidently into 2018 well financed to continue working on our key priorities.
“These include the reinvigoration of exploration and restart of drilling at Crater Mountain, the restart of mining operations at the HGZ, some important follow up drilling work on our graphite project in Queensland, as well as a sampling program on our polymetallic project located nearby.
“In addition to exploration in and around the HGZ, the funding will also Crater Gold to start a drilling program at the Mixing Zone project during 2018 and also explore the other significant exploration targets that exist on other licences the company holds at Crater Mountain.
“We are focused on putting this funding as productively as possible into advancing our projects and generating positive results from our exploration and mining activities, which we hope will put us in a good position to support future capital raisings.”
Key terms of the loan facility include an interest rate of 12% per annum payable quarterly in arrears.
The repayment of the facility will occur after the next equity raising or convertible note raising with the amount repaid to be determined.
The board will consider the company’s financial position and future cash requirements so as not to materially prejudice the interests of the company or its shareholders or the company’s ability to pay its creditors.