ASX-listed Lion One has secured a $US40 million ($52.4 million) debt facility in a deal with Chinese companies Sinosteel and Baiyin for development and construction of its Tuvatu gold project in western Viti Levu, Fiji, subject to due diligence.
Tuvatu is an underground gold project with an estimated (non-JORC) production of 352,931 ounces (oz) over a seven-year period at average grades of 11.3 grams per tonne (g/t) of gold.
Sinosteel will sever as the project’s engineering, procurement and construction (EPC) contractor, while Baiyin will provide off-take facilities.
The agreement has a term of five years at an annual interest rate of 7.5 per cent with a holiday period of either two years from first draw or three months after achieving commercial production — depending on which comes first — followed by 12 quarterly repayments.
Lion One also has the option to to secure an additional $10 million under the same terms as long as mutual agreement is secured between the parties. Lion One will also gain a 2.25 per cent royalty on the first 350,000oz of produced gold.
Commenting, Lion One chief executive officer Walter Berukoff said the company was “pleased to co-operate with Baiyin and Sinosteel for the long-term financing, which will provide low-cost capital and maximum flexibility in the development of Fiji’s next high-grade gold project at Tuvatu.”