1911 Gold Corp (TSX-V:AUMB, OTCQB:AUMBF, FRA:2KY) announced that it has entered into a loan agreement with Auramet International to establish a US$30 million secured credit facility.
The financing is intended to support key operational activities at the company’s True North Gold Project, including the purchase of mining equipment, underground development, and the installation of a new crushing circuit at the mill.
Shaun Heinrichs noted that Auramet has a long and successful history with the True North Gold project, giving the group a deep understanding of its potential.
“This US$30 million facility provides the necessary funding to advance the restart plan outlined in our recently released PEA, which showcased a high-return, low-capital-intensity path back to production,” Heinrichs said.
“By securing this financing, we remain well-capitalized to achieve our key operational milestones at Rice Lake as we position 1911 Gold for a restart in 2027."
Under the terms of the agreement, US$15 million of the facility will be available immediately upon closing, while the remaining US$15 million will be drawn down within 90 to 180 days, subject to certain conditions. The principal will accrue interest at 12% per year, with the first tranche interest deferred for six months. Repayment of the first tranche will occur in 12 equal monthly installments beginning 13 months after closing, while the second tranche will be repaid on the same maturity date.
The credit facility is secured by a first-ranking security interest on all personal property of the company, as well as a collateral mortgage on the True North Gold Project and Rice Lake exploration properties. The agreement includes customary covenants and mandatory prepayment provisions.
In connection with the facility, 1911 Gold will pay Auramet arrangement and drawdown fees, which may be satisfied in cash or by issuing common shares. Additionally, Auramet will receive warrants to acquire company shares at prices above the current market value, exercisable until the maturity date. All shares and warrants issued under the agreement will be subject to a four-month statutory hold period under Canadian securities laws and are not registered for sale in the United States.
The company also entered into an offtake agreement with Auramet, under which Auramet will purchase 100% of the gold produced from the True North and Rice Lake properties until either three years after closing or until the credit facility is fully repaid.
The closing of the first tranche is expected before the end of February, pending approval from the TSX Venture Exchange.