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Minera Alamos secures C$14M financing package for Santana gold mine in Mexico


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Minera Alamos secures C$14M financing package for Santana gold mine in Mexico

Minera Alamos Inc. secured a C$14 million equity and royalty financing package with Osisko Gold Royalties Ltd. to advance the Santana gold mine in Mexico, with closing expected Dec. 18.

Osisko Gold Royalties will acquire 30 million Minera Alamos shares for C$6 million, or 20 Canadian cents apiece, to increase its stake in Minera Alamos to 18.7% from 12.3%. It will also buy a perpetual 3% net smelter royalty on Santana for C$5 million, according to a Dec. 6 news release.

Minera Alamos will also have the right to draw down up to an additional C$3 million from Osisko Gold Royalties for additional funding flexibility during construction and start-up of the planned mine. In exchange, Minera Alamos will grant an additional NSR of two-thirds of 1% up to an aggregate 2% NSR.

Once drawn, each optional royalty tranche will be subject to a minimum delivery to Osisko Gold Royalties of 220 ounces of gold over each 12-month period following the anniversary of the drawdown date.

Minera Alamos expects construction to take six to eight months and cost C$10 million, which will cover construction of a carbon plant, pads, ponds and various earthworks.

The company said it is confident that it will be able to secure sufficient resources to complete construction of the mine, following completion of the Osisko Gold Royalties financing.