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Eastern Goldfields secures commitment letter for A$25M in credit facilities

Eastern Goldfields Ltd. on Dec. 14 said it received a commitment letter for credit facilities totaling A$25 million from Investec Australia Ltd.

The facilities comprise a A$15 million revolving loan facility, a A$10 million equity-linked facility and a gold hedging facility for 40,000 ounces. The company is required to undertake half of the hedging facility, but the remaining half may be used at its discretion.

Eastern Goldfields will use the facilities to complete refurbishment on the processing plant at its Davyhurst gold project in Western Australia and for general working capital through to the start of Davyhurst's gold production in the first quarter of 2017 and associated production ramp-up.

The revolving loan facility is subject to the completion of legal documentation, confirmation of a committed A$10 million standby facility by Investmet Ltd., which is controlled by Eastern Goldfields Executive Chairman Michael Fotios, and the issuance of two equal tranches of call options to Investec, among others.

Eastern Goldfields is working on satisfying the conditions precedent for the A$15 million revolving facility and expects the first drawdown within the next seven days. The company will also implement the mandatory portion of the hedging facility but, at this time, does not intend to draw down the equity-linked facility.