The major milestone follows on the heels of the New Orleans, Louisiana-based company securing a second bridge loan facility from financier Resource Capital Fund VI (RCF VI) of up to US$10 million, in return for an upfront fee of $300,000.
Funds will be available for draw down in four monthly tranches, starting in June, the company said Friday.
The one-year loan bears a 10% coupon and supplements a $5 million bridge loan facility the company secured from the same lender in January.
Under terms of both bridge loans, an amount of more than $25 million will become immediately payable should the company secure further debt from a third-party lender, or sell a royalty or metals stream to fund project construction.
RCF VI, together with RCF V, which are managed under the umbrella of RCF Management, owns about 45.19% of the company, and has several options to increase their stake.
The initial construction focus is expected to include improvements in local infrastructure, such as building a haul road, wharfs and roll-on/roll-off ramps on the Demerara River, and upgrades to the mine camp - all of which will use local contractors where possible.
The Guyana government has approved an initial 40,000t bulk sample at Bonasika for use in product and market development.
With its first purchase order for 1,000 metric tonnes of bauxite ore in hand, First Bauxite's strategy entails initially focusing on a direct shipping ore project, by accessing significant idle kiln capacity in the major markets of Europe, China and the US, to produce ultra-high strength proppants products for the oil and gas market and also sintered bauxite products for the refractory market. A decision to build a downstream processing plant in the US has been deferred for the time being.
Bauxite is a sedimentary rock with a relatively high aluminium content. It is the world's main source of aluminium.
A 2015 feasibility study on the combined Guyana and US projects pegged pre-production costs at $245.6 million, but the Guyana portion only costs about $46.9 million. The company continues discussions to secure full project financing.
Bonasika hosts probable reserves that can support a 30-year mine life, with further upside in the Bonasika 6 and 7, plus Bonasika 1, 2 and 5 projects.
The development pushed the C$5.3 million junior's share price 12.5% higher on Friday to C5c a share.
