Tanzania-focused gold explorer Shanta Gold is on course to get its New Luika project commissioned in the first quarter of next year after securing a bridging loan from a company affiliated to one of its directors.
Shanta Gold has secured a $5m loan facility with Export Trading Group, a company in which Ketan Patel, a director of Shanta Gold, has a beneficial interest. The loan facility was made available on 20 December 2011 and is repayable within six months of a draw down.
The loan bears an interest rate of 8% a year and Export Trading Group is also entitled to an option over new ordinary shares of Shanta Gold equal to 3% of the value of any loan draw down amount, with such options to be exercisable at the weighted average mid-market closing price of ordinary shares of the company for the ten days preceding the loan draw down.
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The company is also at an advanced stage of negotiation for an additional loan facility of $15m-20m with other parties. The directors believe the additional loan facility will provide sufficient funds for the company to achieve commissioning at New Luika by the end of the first quarter of 2012.
Significant progress has been made at New Luika, the company said, adding that, as at 17 December 2011, more than 10,000 ounces of gold at 4.9 grams per tonne were stockpiled at New Luika.
As for the company's Singida project, the mining licence has been issued and received by Shanta from the Ministry of Energy and Minerals, the company said.
The shares rose a penny to 21.75p on the news.
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