Geomaque financing for Vueltas del Rio construction
Geomaque Explorations Ltd
GEO
Shares issued 45,659,689
2000-03-31 close $0.25
Monday Apr 3 2000
News Release
Mr. Sean Stokes reports
Geomaque Explorations has signed an agreement with Resource Capital Fund II
LP to provide debt financing for construction of the Vueltas del Rio gold project in
Honduras.
Life-of-mine cash costs at Vueltas del Rio are projected to average $169 per
ounce and gold production at an annual rate of 60,000 ounces is expected to
begin in the fourth quarter of 2000. The majority of Vueltas del Rio construction is
complete. Phase One of the leach pad and the process ponds are constructed, the
crusher/stacker/agglomerator is on site and the ADR plant has been fabricated.
The remaining construction capital requirement is estimated at $3-million.
Resource Capital Fund II L.P., managed by Resource Capital Management LLC,
an investment company associated with the Rothchild family, has agreed to
provide a $3.5-million, 30-month bridging loan facility. No gold hedging is
required, however a $1-million hedging line is provided in connection with this
facility. Closing, which is subject to regulatory approval and legal documentation,
is expected within 60 days.
The loan facility has an interest rate of 5 per cent per year and a prepayment
option at any time prior to expiry on Sept. 30, 2002, is provided. Fees payable to
RCF are an establishment fee of one million common share purchase warrants
exercisable at 28 cents until Sept. 30, 2002; and $0.825-million on each of Sept.
30, 2001, and Sept. 30, 2002, payable in cash or common shares at RCF's
option. Should RCF elect to receive common shares, the price will be based on
the 20-day average of the market price at that time. RCF is entitled to nominate a
representative to the board of directors for the period of the loan.
"Vueltas del Rio is an excellent project with significant upside and with this
financing we're poised to quickly finish construction," said John Paterson,
president and chief executive office. "With the low cash costs expected, the start
of production at Vueltas later this year will significantly enhance cash flow and
enable Geomaque to realize its growth plans."
Operations at the San Francisco mine progressed well during the first quarter of
2000. A total of one million tonnes of ore, 11 per cent over budget, at a grade of
1.26 grams per tonne were mined and crushed during the quarter, resulting in a
record of 40,600 ounces of gold loaded on the heap. Gold production before final
settlements was 17,000 ounces. This compares with production of 14,225 ounces
in the fourth quarter of 1999.
"Under the new mine plan, San Francisco is currently producing over 250 ounces
of gold a day, and given the grade and tonnes we're putting on the pad, we
anticipate reporting strong production numbers again in the second quarter," said
Mr. Paterson.
The company anticipates minimum gold production of 50,000 ounces from the
San Francisco mine in 2000.
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