Guanajuato Silver ups gold loan facility to US$13.3 million
Guanajuato Silver Co. Ltd. [GSVR-TSXV] said Thursday it has increased the size of a previously announced gold loan credit facility with Ocean Partners UK Ltd. to US$13.3 million, up from an earlier target of US$7.5 million. Proceeds are 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 from the date of the initial draw, is repayable in equal fixed monthly installments of gold totaling approximately 338 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.
“The expanded credit facility will provide enhanced financial flexibility as we look to expand production through 2024 at all four producing silver mines in Mexico,’’ said Guanajuato Silver (GSilver) Chairman and CEO James Anderson. The additional principal amount of the expanded facility has been advanced in a single draw to the company. A portion of the expanded facility will be used to pay down a portion of the outstanding loan due to Ocean Partners, totaling $3.8 million. The remainder of the funds will be used for capital spending initiatives and for general working capital purposes.
GSilver shares eased 2.8% or $0.005 to 17 cents in early trading Thursday. The shares trade in a 52-week range of 65 cents and 15.5 cents.
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 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.