Great Western Minerals Group (CVE:GWG)(OTCQX:GWMGF) Thursday announced it has satisfied the escrow release condition on its $90 million convertible bond financing, for the development of its Steenkampskraal project in South Africa.
In early April, Great
Western announced it had closed the convertible bond financing and with
release conditions met, the remaining funds net of US$10.8 million that
remained in escrow to satisfy interest payments, will be released
immediately to the company.
In order to satisfy the release
condition, Great Western said it was obligated to have Caracle Creek
International Consulting provide escrow a confirmation letter stating
that at least 20,000 metric tonnes of total rare earth oxides (TREO), in
the sum of the measured, indicated, and inferred resource categories
using a one per cent cut-off grade, are present at Steenkampskraal.
company said the letter indicates the presence of at least 26,600
metric tonnes of TREO under the inferred resource category.
are extremely pleased to be able to deliver, as scheduled, the
confirmation letter that enables the release of funds from the
offering," Great Western's president and CEO Jim Engdahl said.
these funds in place, we are positioned to continue with the
development of the Steenkampskraal operation, including the continuation
of exploratory drilling that we anticipate will further increase the
The company noted that the confirmation
letter is based on geological and assay information limited to the
immediate area of the historic mine developments at Steenkampskraal.
These include, recent resource confirmation drilling, the first phase of
underground channel sampling, structural mapping and underground
mapping of mineralization.
The company said it expects to file an NI 43-101 report on the Steenkampskraal property on or before May 31, 2012.
included in the letter, but anticipated to be incorporated into the NI
43-101 report, are results from recent sampling of mineralization in the
up-dip and down-dip extremities of the historic mine area, the two
tailings dams, and the rock dump, Great Western said.
The program at Steenkampskraal is central to ensure a strong flow of feedstock for the company's downstream processing.
Western intends to be one of the first to produce significant
quantities of the more valuable heavy rare earth oxides, which are
important materials for alloys.
The company is on track for both
these targets, as well as for the launch of mining activities by the end
of 2012, and the construction of a mixed chloride plant and separation
plant near Steenkampsraal in the first half of 2013.
At its LCM
processing operation in the UK, the company completed the first pour
with its new strip casting furnace at the end of January, and in late
March, the company placed an order for a second strip cast furnace,
allowing alloy manufacturing capacity to double when the second furnace
arrives and is commissioned later this year.
The second strip
cast furnace will increase the total production capacity of LCM to
approximately 2,000 tonnes per annum of rare earth alloys.
The company is boosting capacity in preparation for its rare earth production coming online, and as demand for the metals grows.