Guanajuato Silver closes US$7.5 million loan facility
Guanajuato Silver Company Ltd. [TSXV-GSVR] said Tuesday it has closed a US$7.5 million credit facility with Ocean Partners UK Ltd. with proceeds earmarked for debt repayment and capital spending initiatives at the company’s operations in Mexico.
The unsecured loan facility is for a term of 36 months, and is repayable in equal fixed monthly installments of gold totaling approximately 191 ounces per month for 30 months, following a six-month grace period.
The number of ounces to be delivered each month is based on a discount to the LBMA (London Bullion Market Association) gold closing price of US$2,046.95 on November 29, 2023.
GSilver shares eased 4.4% or $0.015 to 32.5 cents. The shares currently trade in a 52-week range of 65 cents and 24.5 cents.
Guanajuato (GSilver) is a precious metals producer engaged in reactivating past producing silver and gold mines in central Mexico. The company produces silver and gold concentrates from the El Cubo Mine, Valenciana Mines Complex (VMC) and San Ignacio mine. All three are located in the state of Guanajuato, which has an established 480-year mining history.
Additionally, the company produces silver, gold, lead and zinc concentrates from the Topia mine in northwestern Durango. The portfolio includes four operating mines and three processing facilities.
San Ignacio is a high-grade epithermal vein underground mine. Mineralized material from San Ignacio is transferred to the Valenciana Mines Complex for processing at the Cata mill.
GSilver has two outstanding loans due to Ocean Partners totaling US$8.4 million. Approximately US$4.6 million of the new facility will be used to extinguish in full one of the outstanding loans due to Ocean Partners.
The balance will be used for capital spending initiatives at the company’s El CuboM Ines Complex and Valencia Mines Complex as well as for general working capital purposes.
“Ocean Partners has been our preferred metals trading partner since our first sale of precious metals concentrates back in 2021; they have always been first-in-line to offer support for our strategic initiatives as we continue to grow GSilver into a mid-tier producer of precious metals in Mexico,’’ said Ocean Partners Chairman James Anderson.
GSilver recently announced a news mineral resource estimate for its San Ignacio mine.
The company said the measured and indicated silver equivalent resource (AgEq) has increased by 130% from a previous estimate, while the resources in the inferred category are up by 283%.
Guanajuato says the measured and indicated resource now stands at 7.6 million ounces at 300 g/t AgEq within 790,000 tonnes, including 3.13 million ounces of silver and 53,000 ounces of gold. The inferred resource now stands at 22.16 million ounces, grading 318 g/t” AgEq within 2.16 million tonnes, including 8.9 million ounces of silver, and 158,000 ounces of gold.