Altaley Mining Corporation (TSX-V:ATLY) said it has executed a loan agreement whereby Sail Natural Resources LP will provide a US$5 million loan facility to Altaley.
The company noted that proceeds from the loan facility will be used to fund the final costs of construction and working capital at Altaley's Tahuehueto gold mine project in Mexico.
The loan has a four-year term with a yearly interest rate of 13.5%, where Altaley will make four quarterly payments of interest only on the outstanding amount of the loan beginning on March 10, 2022, and continuing for four occurrences (being 12 months in total) ending on December 10, 2022.
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There will also be a 15-month grace period on the principal with blended monthly payments of principal and interest on the outstanding amount of the loan beginning on March 10, 2023, and continuing for 12 occurrences (being 36 months in total) ending on December 10, 2025.
As well, Altaley said upon advancement of funds it will issue 10 million company share purchase warrants, with each warrant being exercisable into one Altaley common share within 36 months at an exercise price of $0.35 per share.
The bonus warrants contain vesting provisions, which include that the entire loan proceeds be received by Altaley.
The loan agreement and grant of bonus warrants is subject to approval by the TSX Venture Exchange.
The company added that the Sail Natural Resources bridge loan replaces the funding recently lost to Altaley upon the cessation of operation of the Accendo Banco and is more than enough capital to complete and ramp up operation at Tahuehueto, where construction has advanced to at least 95% completion and where initial production is anticipated to begin at the end of January, only slightly behind managements targeted expectations.
Altaley Mining holds two wholly-owned Mexican gold, silver, and base metal mining projects.
Campo Morado is an operating polymetallic base metal mine in Mexico with mining and milling equipment currently producing at an average rate of approximately 2,100 tonnes per day.
Altaley’s other asset is the Tahuehueto project is in northwestern Durango State, Mexico, where construction has advanced to near completion on its 1,000 tonnes per day processing facility and related mine infrastructure to initiate production of gold, silver, lead, and zinc in concentrates.
Contact Sean at sean@proactiveinvestors.com