Lion One Metals Ltd. said June 4 that it signed an indicative term sheet with Sinosteel Equipment & Engineering Co. Ltd. and Baiyin International Investment Ltd. for a US$40 million financing facility to develop the Tuvatu gold project in Fiji and construct a processing plant for the mine.
The deal also incorporates a contract with Sinosteel for engineering, procurement and construction work at the project as well as a gold doré off-take deal with Baiyin.
The facility will have a five-year term and an annual interest rate of 7.5%. There will be a principal holiday and capitalized interest for the earlier of either two years from the first draw or three months after achieving commercial production, followed by 12 equal quarterly repayments. As part of the deal, the project will also be subject to a 2.25% net smelter royalty on the first 350,000 ounces of gold produced.
Lion One will have the option to increase the principal by US$10 million, under the same terms and pro rata royalty, subject to all parties' approval. The miner will also have the right to get a new facility of up to US$10 million, provided it will not be secured against the same security used for the Sinosteel-Baiyin facility.
The agreement's closing is expected in the third quarter.
