Caracal Gold PLC (LSE:GCAT) has reported progress in its financing arrangements for the Kilimapesa gold mine and processing operation in Kenya and the Nyakafuru gold project in Tanzania.
The company has been working on securing financing for the Kilimapesa expansion project, and it said Philoro Global Trading AG has confirmed its commitment to participate in the funding, pending the company securing the remaining financing required.
In February, Caracal announced that it had drawn down US$1mln from ORCA Capital GmbH and granted it an option to subscribe for an additional US$4mln of loan notes.
Caracal also reached a settlement with Mill End Capital Limited, the details of which were announced in May. The company submitted the first draft of the prospectus for approval to the Financial Conduct Authority (FCA) in April and is working with its advisers to seek approval.
Regarding operations, Caracal faced limited activities in January and the first half of February due to delays in funding. However, operations at the Kilimapesa Mine resumed in mid-February, including heap-leach and milling operations, as well as open-cast mining.
A high-grade zone was discovered on the Kilimapesa Hill deposit, leading to mining operations starting in March, and expansion work has continued, with the delivery of new equipment and the commencement of pad construction.
In the update on operations and exploration activities for the first quarter of 2023, Robbie McCrae, CEO of Caracal, commented: "The discovery and processing of the high grade zone on the Kilimapesa Hill has assisted greatly in March and the gold price has also been kind to us during March - the production numbers for the quarter are down but when you consider the production only recommenced on 5 March we are well positioned for the Q2 period."
He added: "The Mill End financing has been settled and the draft prospectus lodged with the FCA to commence the approval process.
"Activities to secure the expansion funding have progressed well during the period and we expect to announce financing in due course."