Mineral & Financial Investments Ltd (LON:MAFL) has announced it has taken an interest in Golden Sun Resources Limited, a group that’s advancing the Costa Rica based Bellavista mine into production later this year.
It has purchased US$250,000 of Golden Sun’s ‘Series B’ convertible debt. The loan notes mature in April 2024 and they carry 20% interest per year. ‘Series A’ notes are held by Golden Sun’s board management and a few people close to board members.
The loan notes are convertible into equity after 30 April 2021 and once the mine has generated at least US$350,000 of cash flow per month for three consecutive months.
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Presently, M&FI’s loan note holding would equate to a 2.4% shareholding in Golden Sun – assuming a full conversion and that no additional dilutive financing occurs.
"This investment is consistent with our cornerstone investment principles underpinning our ongoing search for investments with attractive financing terms backed by outstanding natural resource assets, good management and representing good value within the mining sector,” said Jacques Vaillancourt, M&FI chairman.
“Bellavista should be in production during 2019 and is precisely the type of near-term cash flow opportunity that M&FI is seeking. Bellavista is a high-quality asset that will be advanced prudently."
The Bellavista mine is slated to be in production during the third quarter.
It has previously been in operation, producing at around 50,000 ounces per year between 2005 and 2007, and, in the most recent estimation was seen to contain some 1mln ounces of gold.
M&FI highlighted that its investment implies a very attractive entry valuation of just US$8 per ounce, for the in-situ gold resource.
The company also noted that Golden Sun is pursuing a ‘prudent, gradual, self-financing’ expansion plan for the mine.