Amaroq Minerals Ltd (TSX-V:AMRQ, AIM:AMRQ) said it has agreed non-binding heads of terms, subject to final documentation, for US$49.5 million in debt financing to help it accelerate production and cash flow generation at its cornerstone Nalunaq gold development project.
The debt package comprises US$18.5mln in senior debt, US$21mln in convertible notes and a US$10mln cost overrun loan.
The financing, together with existing capital, is expected to enable the transition from the bulk sample stage to trial mining, processing and production of gold doré on site at Nalunaq in a staged approach, ahead of full-scale production.
The company intends to utilise the financing to accelerate the phased construction and ramp-up of the 300 tonnes per day processing plant and associated infrastructure contemplated in 2020.
The decision is underpinned by positive results on the Nalunaq orebody, published in December 2022, with improved grade at Nalunaq, confirmation of the Dolerite Dyke Model for predicting high-grade mineralisation, and a third-party engineering study completed in 2021.
Amaroq controls gold and strategic mineral assets covering an area of 7,866.85 square kilometres in Southern Greenland.
The company is also intending to explore the possibility of a main market listing on Iceland's Nasdaq Exchange.
Additionally, Amaroq continues to progress towards the closing of the joint venture transaction with GCAM LP announced on 10 June 2022, in which GCAM subscribed £18mln for shares in the strategic minerals JV Gardaq ApS, representing 49% of its issued shares.
The company expects to satisfy the remaining escrow conditions, and to complete the GCAM Transaction, before 30 April 2023.
"We are very pleased to have successfully arranged this US$49.5mln debt package in addition to our available cash in treasury of US$34mln, to unlock near-term value in the gold side of our company. Alongside the $22 million we have secured with GCAM for exploration over our strategic metals portfolio, Amaroq has a very exciting future in front of it,” said Eldur Olafsson, chief executive of Amaroq in a statement.
"The financing will enable the transition of activities at Nalunaq from the mining of the Bulk sample and potential toll treatment of ore to the extension of exploration activities, delivering a mineral reserve, and commencing trial mining and ore processing on site prior to starting commercial production," he added.
Amaroq said it will release its full-year results on 31 March.