Lion One Metals Limited (LIO:TSX.V; LOMLF:OTCQX) recently announced it has signed an indicative term sheet with Sinosteel Equipment & Engineering Co., Ltd. and Baiyin International Investment Ltd. It combines an EPC (engineering, procurement and construction) and a gold doré off-take financing facility for US$40 million. The funding is going to be used for the development and construction of a processing plant for the company's wholly owned and fully permitted Tuvatu Gold Project located in Fiji.
"We are pleased to cooperate with Baiyin and Sinosteel for the long-term financing, which will provide low-cost capital and maximum flexibility in the development of Fiji's next high grade gold project at Tuvatu," said Walter H. Berukoff, Chairman and CEO of Lion One.
Baiyin will function as the doré off-taker, and Sinosteel the project EPC contractor. Board approvals and final documentation will be completed before closing of the facility, which is expected Q3 of 2018.
Some of the facility details are an annual interest rate of 7.5% for a 5-year term and a 2.25% Net Smelter Return (NSR) on the first 350,000 ounces of gold produced. Principal holiday and capitalized interest for the earlier of two years from first draw or three months after achieving commercial production are included as well.
The principal of the facility can be increased by an additional $10 million at the same terms, per mutual agreement. The right to obtain a new facility of up to $10 million is another option available to Lion One, as long as it is not secured against the security under the facility.
Lion One Metals is based in Vancouver, British Columbia. The company is focused on advancing to production at its 100%-owned and fully-permitted Tuvatu Gold Project located in the Republic of Fiji.
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