i-80 Gold Corp. has announced a US$135 million (M) financing package to help it realize its goal of creating a Nevada-focused mid-tier gold producer.
The gold mining group told investors that the package, which comprises convertible loans along with gold and silver purchase and sale agreements (secured against its Ruby Hill and Granite Creek projects) when combined with the firm's recent equity financing will mean it has around US$200M in the treasury.
"With multi-million ounce gold and silver resources, and our enviable treasury position, we now pursue our objective to be one of the mining industry's fastest growing producers," said Ryan Snow, the finance chief of i-80, in a statement.
"Our primary target is to quickly grow our production profile to create a Nevada-focused mid-tier gold producer and achieve our goal of becoming one of the largest producers in the State," added Ewan Downie, CEO.
"As one of only three companies in Nevada with infrastructure to process refractory mineral resources, i-80 has gained a strategic advantage for long-term mine development".
The company said US$60 million of convertible loans have been fully funded and issued—US$50M with an affiliate of Orion Mine Finance—and US$10 million with a fund managed by Sprott Asset Management (TSX:SII) USA and a fund managed by CNL Strategic Asset Management.
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There is also a US$45 million gold prepay agreement struck with affiliates of Orion, including an accordion feature potentially to access up to an additional US$50 million at i-80's option.
And there is a US$30 million silver purchase agreement also with affiliates of Orion, which includes an accordion feature to potentially access a further US$50 million at i-80's option.
The Orion and Sprott convertible loans bear interest at 8% per annum and mature on December 13, 2025, and December 9, 2025, respectively.
Under the gold pre-pay deal, beginning on March 31, 2022, i-80 will deliver to Orion 3,000 troy ounces of gold for each of the quarters ending March 31, 2022 and June 30, 2022, and thereafter, 2,000 troy ounces of gold per calendar quarter until September 30, 2025.
Under the silver deal, beginning on April 30, 2022, i-80 will deliver to Orion 100% of the silver production from the Granite Creek and Ruby Hill projects until the delivery of 1.2 million ounces of silver, after which the delivery will be reduced to 50% until the delivery of a total of 2.5 million ounces of silver, after which the delivery will be reduced to 10% of the silver production solely from Ruby Hill project.
There is also an amended and restated offtake deal, which includes the increase in the term of the agreement to the end of 2028, the inclusion of the Granite Creek and Ruby Hill projects, and the increase of the annual gold quantity to up to 37,500 ounces in respect of the 2022 and 2023 calendar years and up to a total of 40,000 ounces in any calendar year after 2023.
In addition, in connection with the gold prepay deal, i-80 said it has issued to Orion warrants to buy up to 5.5 million shares of the company, which may be exercised at any time for US$3.275 per share until December 13, 2024.
i-80 says it is studying and costing the retrofitting of the Lone Tree Autoclave, advancing an underground development program for the Granite Creek project, executing an initial drill campaign at Ruby Hill. It also intends to advance the McCoy-Cove Property through to advanced exploration.
Contact the author at giles@proactiveinvestors.com