Alkane Resources (ASX: ALK, OTCQX: ANLKY) has entered into a mandate for Credit Suisse to exclusively act as arranger and underwriter in respect of a Project Loan Facility and associated Gold Hedging Facility.
The facility is for the construction, start-up and operation of the company’s Tomingley Gold Project in the central west of New South Wales.
Alkane said the financing will indicatively comprise of a Project Loan Facility of up to A$45 million and a Gold Hedging Facility of up to 163,000 ounces.
Tomingley is based on three gold deposits located 14 kilometres north of the company’s Peak Hill Gold Mine, with an Identified Mineral Resource of 689,000 gold ounces.
A Definitive Feasibility Study was completed at the end of 2010.
The base case of the DFS incorporated the current ore reserve and anticipated additional recoverable mineral resources from the open pits and underground mining, over a project life of around 7.5 years recovering 369,261 ounces.
The Project Loan Facility and Gold Hedging Facility mandate is subject to a number of conditions precedent and fees, and will expire on 31 December 2011 if a binding Project Loan Facility is not executed.
Noah’s Rule Pty Ltd continues to advise the Alkane on the appropriate financing strategies for the development of Tomingley.