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Argonaut gets Magino funding package

Argonaut Gold has announced a funding package to complete the development of the Magina gold mine build in Ontario, Canada. The company previously reported a cost blowout from the original C$510 million to $800 million in December 2021 and then $920 million in May.
Argonaut gets Magino funding package Argonaut gets Magino funding package Argonaut gets Magino funding package Argonaut gets Magino funding package Argonaut gets Magino funding package

Argnonaut Gold's Magino in Ontario, Canada

The company has received a binding commitment letter from a syndicate of lenders for a six-year, US$200 million loan and a three-year US$50 million revolving credit facility for a total debt limit of US$250 million. The proceeds will refinance Argnonaut's existing debt.

"This debt financing arrangement, alongside the proposed equity financing, will put Argonaut Gold in a strong financial position to complete the Magino project and move it forward into production by the end of the March quarter in 2023," said Argonaut Gold president and CEO Larry Radford.

The facilities will bear an interest rate of 1.25% per annum on the committed but undrawn portions, and a rate equal to the adjusted term secured overnight financing rate plus 6% per annum on drawn portions. Currently, this would amount to about 7.45% per annum.

The facilities include mandatory gold hedging covering 300,000 ounces between 2023 and 2027, a Canadian dollar to US dollar foreign exchange hedging programme, a minimum US$150 million equity raise, of which US$123 million must be raised and spent prior to the initial drawdown, a detailed review by independent technical engineers of the updated Magino cost to complete estimate and project schedule in respect of the Magino project and other information.

Shares in Argonaut Gold are trading at C61c, valuing the company at C$203 million.

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