Altyn (LON:ALTN) has announced that it has successfully applied for a loan of US$17m from the Kazakh Bank JSC “Bank Center Credit” (BCC). This is a major step forward for the company which will enable it to execute its much-anticipated growth strategy targeting over 100kozpa at AISC of less than US$500/oz. The loan has a seven year term with interest of 6%pa.
In H1 2019 ALTN produced 5.6koz of gold at an AISC of US$1,073/oz which despite resulting in positive EBITDA of US$1.5m meant a net loss of US$600k. in recent years a lack of funding has constrained production due to the need for additional equipment and shaft development. However, with an existing plant of 850ktpa capacity there is significant scope to increase output and reduce unit costs through better utilisation of the plant. Indeed, this means that development capex was previously guided to around US$41m and based on the prior announced growth plan the US$17m loan would likely be sufficient to kickstart construction with the remainder of development capital funded by internally generated cashflow.
The successful project financing is a major positive announcement which will enable the company to begin to fulfil its significant potential supported by a backdrop of significantly stronger gold prices.
Our forecasts are Under Review as a result of this announcement.