Wallbridge Mining Co. Ltd. secured an US$8 million bridge loan with Auramet International LLC to fund a 35,000-tonne bulk sample program at its Fenelon gold project in Quebec.
The loan, which bears interest at an annual rate of 20.75% on the drawn amounts, will also be used to repay an existing US$2.5 million loan to William Day Holding Ltd. before maturity, according to a March 27 release.
Draws on the loan are scheduled between April and July, with the initial draw contingent on Wallbridge completing an equity raise of at least C$2 million.
Auramet, meanwhile, was granted a call option on 6,000 ounces of gold struck at C$1,780/oz. It may also purchase 100% of gold production from the bulk sample in 2018, 2019 and the first year of commercial output at spot prices then or under forward pricing contracts.
The bulk sample program covers the extraction of 35,000 tonnes of mineralized material with a grade ranging from 18 g/t to 25 g/t from planned stopes within the first 125 meters from surface. It also includes about 5,000 to 8,000 meters of drilling to expand the resource along strike and to depth.
A further 10,000 meters of drilling is planned at the property later in the year to follow up on known zones and expand resources away from mine workings, the company said.