China Nonferrous Gold Ltd. said March 5 that it signed a financing agreement with CNMC International Capitals Co. Ltd. for a US$90 million loan facility, which will be used to repay outstanding facilities and fund restoration of production at the company's Pakrut gold project in Tajikistan.
CNMC International is an associate of China Nonferrous Metals International Mining Co. Ltd., which is a 38.36% shareholder of China Nonferrous Gold. The loan is valid for three years and will be repayable Feb. 8, 2020. It will incur an annual fixed interest rate of 5.8% on the amount drawn down, with interest payable semiannually in arrears.
With the loan proceeds, China Nonferrous Gold will repay a US$30 million outstanding facility with the Macau branch of China Construction Bank Corp. immediately and a US$30 million outstanding facility with CNMC International later in the year. The company's gross debt outstanding stood at US$364.2 million prior to the planned repayments, of which US$175 million will be repayable within the year. The repayments will reduce the debt due this year to US$115 million.
The funds earmarked for Pakrut will go to expenses such as purchasing equipment, completing the construction of the ventilation system, tailings pond and backfill station and for working capital.
Certain of the China Nonferrous Gold facilities are secured by a pledge over its ownership of the Pakrut mine, where production is expected to resume within the first half. The company still needs wider refinancing to resume operations at Pakrut, and the remaining financing talks are expected to be concluded ahead of the Dec. 31 deadline.
