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
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.