AUSTRALIAN-based company Kula Gold Ltd has arranged a working capital facility of AU$3 million (K6.82 million) with RMB Resources (RMB).
The miner said this would ensure the company of funding through the final stages of the government’s approval process for the Woodlark Island gold project in Milne Bay.
The facility would also provide a working capital for next year.
The company is the 100% owner of an advanced stage gold project with more exploration potential on Woodlark Island, Milne Bay.
The lenders for the facility will be RMB Australia Holdings Ltd and the Pacific Road Resources Funds, both of which are shareholders in Kula Gold and would equally provide the loan funds.
Kula Gold chief executive Stuart Pether said: “The arrangement of the facility with Kula Gold’s two major shareholders shows their ongoing support for Kula Gold and their recognition of the underlying value of the project.
“The facility ensured the company was funded through the final stages of the Government approval process and provides working capital for most of 2014,” he said.
The 12-month facility provided funds at an interest rate of the three-month bank bill swap (BBSW) rate plus 5.5% per annum.
As the facility was drawn down, Kula Gold would issue options to the lenders proportional to the funds drawn from the facility.
The exercise price of the options would be equal to a 25% premium to the 30-day volume weighted average Price (VWAP) on the closing date of the facility, which is expected to be in the middle of next month.
A community consultation forum was called for next week (Nov 27-29)in Alotau The forum had been seen as a “milestone towards the granting of the mining lease for the project”.
The forum would be opened by Minister for Mining Byron Chan and to be attended by representatives of the key stakeholders in the Woodlark Island Gold Project.
The forum aimed to initiate the discussions on sharing of benefits and stakeholder commitments for the project
Pether said: “The calling of the community consultation forum is another key milestone towards the granting of the Mining Lease for the Woodlark Island Gold project.
“The company is looking forward to completing these key milestones by the end of the December quarter.”