Monday, 13 August 2012

Solitario secures $5 mln credit facility with RMB Australia to advance Mt. Hamilton

Solitario Exploration & Royalty Corp. (AMEX:XPL)(TSE:SLR) has secured a $5 million debt facility from financial services firm RMB Australia Holdings, the company said Monday.
The proceeds from the secured credit facility will go toward advancing Solitario’s Mt. Hamilton gold project in Nevada, and for general corporate purposes.
“This facility strengthens Solitario‘s financial position to advance the Mt. Hamilton project through permitting to construction,” chief executive Chris Herald said in a statement.
Funds drawn will have bear an interest rate of the current 90-day Libor rate of 0.44 per cent, plus five per cent. The facility has a 36-month term with interest paid quarterly, and has no pre-payment penalty.
Solitario has paid a five per cent upfront fee and issued RMB 1.62 million warrants. Each warrant enables the firm a right to buy one share for an exercise price of US$1.54 each, a 23 per cent premium to the prior close, for a three year period.
The facility was secured by a pledge of Solitario’s 80 per cent stake in the Mt. Hamilton joint venture, and by a general security interest in most of its remaining assets.
In June, exploration-stage company Solitario said Sandstorm Gold bought a 2.4 per cent net smelter return royalty on the Mt. Hamilton project for $10 million.
The Mt. Hamilton gold project is located in Eastern Nevada. In February, Solitario released a feasibility study on the Centennial gold-silver deposit, and demonstrated favourable economics for an open pit operation with heap leach extraction.
The mine, once in operation, is slated to produce 48,000 gold ounces and 330,000 ounces of silver annually for eight years.
In addition, the project has the potential to add resources and extend its mine life. Currently, three drill rigs are operating on the project in the Seligman mineralized area.
Solitario owns an 80 per cent interest in the project and is the project manager. The company is a gold, silver, platinum-palladium and base metal exploration and royalty company actively exploring in Brazil, Mexico and Peru.

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