Kin Mining NL has successfully executed a binding term sheet for A$35M with Canadian based Sprott Private Resource Lending. The A$35M debt package will support the full pre-production and construction cost of Kin’s 100% owned Leonora Gold Project located in the North-Eastern goldfields region of Western Australia, forecast to be in production during the second half 2018.
The Binding Term Sheet presented by Sprott, a globally recognised leader in natural resource investing, is competitive and favourable for Kin shareholders. Key terms include:
- First payback is expected 18 months after first drawdown (expected 28 June 2019)
- Annual interest rate of 8.00%, plus the greater of US 12-month LIBOR or 1.00%
- No cash flow sweep
- No hedging
- No cost overrun facility
- 3,500,000 KIN ordinary shares will be issued to Sprott on closing with the shares to be escrowed for four months
- 1.5% NSR on first 100,000oz gold produced by the LGP
- Three-year loan term
The Credit Facility provides Kin with sufficient funding to carry out the necessary pre-production capital works, including the relocation and upgrade of the Lawlers mill to commence production at the LGP. The Definitive Feasibility Study estimated a pre-production capital cost of $30M with an 18% contingency of $5.4M for a total of $35.4M.
Sprott has concluded technical due diligence and received investment committee approval. The Credit Facility remains conditional on completion of legal and formal documentation and is expected to be closed by 23 December 2017. A minimum equity raise will be required as a condition subsequent.
Narinder Nagra, Managing Partner of Sprott, commented: “As one of the leading investors dedicated to the natural resource sector, Sprott is excited to partner with Kin to develop the LGP. Our partnership with Kin is consistent with our strategy of providing innovative and flexible capital to maximise the value of exceptional projects.”
Managing Director, Don Harper said “We are delighted to partner with Sprott, the Credit Facility will allow us to immediately commence the development of the LGP and set us on a clear pathway to gold production and cash flow. Sprott is known to be well-versed in determining the viability of resource projects and making astute investment decisions. We look forward to collaborating with Sprott to become Western Australia’s next gold producer.”