Horizon Minerals Ltd (ASX:HRZ) has taken another step towards proposed production at the Cannon Gold Project in Western Australia by executing a detailed Loan Agreement and General Security Deed with Nebari Partners LLC for a US$5 million secured credit facility.
This follows the signing of a binding term sheet agreement with Nebari on October 19, 2022.
The credit facility is comprised of a two-tranche Convertible Loan Facility with US$2 million in Tranche 1 and US$3 million in Tranche 2.
READ: Horizon Minerals secures US$5 million to help bring Cannon Gold Project to production
Use of funds
Proceeds from the facility will immediately be used to settle the A$2.1 million deferred Cannon payment to Aurenne and to contribute to the upfront capital costs of the proposed Cannon underground mine.
At the time of the binding term sheet agreement, Horizon’s managing director Jon Price said: “It has been a pleasure to work with the team at Nebari who have worked rapidly to agree the transaction on highly competitive commercial terms enabling us to secure and advance the Cannon Gold Project into development and production in 2023.
“We also thank the team at Aurenne for agreeing to extend the deferred payment timing to fit in with the completion of the convertible loan facility and shareholder approval.”
Cannon progress
Horizon continues to advance the Cannon project with regulatory approvals and tender review the main focus and a development decision is expected in the March quarter of 2023 once approvals are granted.
The company plans to utilise the contract mining and toll milling model to advance a sequence of underground developments with Cannon, Penny’s Find and Rose Hill.
Horizon aims to generate cash to support the large-scale exploration program and future mine developments across core assets in Kalgoorlie and Coolgardie.
The Nebari facility is subject to conditions precedent typical for a transaction of this nature including, but not limited to, obtaining prior shareholder approval which is scheduled for the upcoming Annual General Meeting on November 25, 2022, at 2pm.
About Nebari
Nebari is a United States-based manager of privately offered pooled investment vehicles including Nebari Natural Resources Credit Fund I, LP and Nebari Gold Fund 1, LP, which are funding this transaction.
The leadership team has deep experience with leading global mining companies and financial institutions.
Nebari is known for partnering with motivated and capable management teams focused on achieving clear plan targets.