Great Panther Mining Ltd. said Jan. 6 that it entered into a US$11.3 million gold dore prepayment agreement with Samsung C&T Corp.'s subsidiary Samsung C&T U.K. Ltd.

The deal involves the delivery and sale of about 3,000 ounces of gold contained in dore per month over a two-year period from Great Panther's Tucano gold mine in Brazil.

The gold deliveries will be sold at a 0.65% discount to the benchmark price of gold at the time of delivery and will be used to offset repayments of the advance, which are set between 11 months and 24 months after the date of the advance.

The advance will bear interest at an annual rate of three-month U.S. dollar London interbank offered rate plus 5% and is secured by a pledge of all equity interests in the company's subsidiary owning the Tucano mine.

Great Panther has a full option for early repayment of the advance, subject to a 3% penalty applied to the outstanding balance.

Meanwhile, Samsung gained the right from the deal for an offer for concentrates produced from Great Panther's Coricancha gold mine in Peru in certain circumstances.

The transaction is expected to close in February, including the funding of the prepayment.