Nickel miner Regency Mines (LON: RGM) has agreed a loan deal with YA Global Master SPV, a fund that is managed by Yorkville Advisors.
The deal enables Regency to borrow US$3.3 million at a rate of six percent per annum, and it is intended that the loan will be repaid in scheduled instalments within 15 months of drawdown.
The loan is secured under a SEDA (standby equity distribution agreement) between YA Global and Regency’s 21 percent-owned subsidiary Red Rock Resources.
The net loan proceeds of US$2.9 million will be used to meet working capital requirements and to advance the company’s joint venture with Direct Nickel at Mambare in Papua New Guinea.
The Mambare project is a major lateritic nickel deposit that has been estimated to contain 630 million tons of ore at 0.78 percent nickel and 200 million tons at 1.01 percent nickel.
Regency and Direct Nickel are aiming to create a company there that can produce up to 20,000 tons per annum of nickel with four years, eventually expanding to 60,000 tons per annum.
At 2:55pm, Regency’s shares were trading higher by three percent at 3.7 pence each.