G Mining Ventures Corp (GMIN) recently announced that it has entered into binding commitments with respect to a comprehensive construction financing package totaling US$481 million for the development and construction of its 100% owned Tocantinzinho Gold Project in Brazil which will be the third largest in the country.
The project remains on track to achieve production in the second half of 2024. G Mining said: “Securing financing on schedule, despite a volatile market environment, represents a strong statement of support for the management team, as well as the technical and economic merits of the project.”
The figure includes a major gold stream deal with Franco-Nevada which represents one of its largest gold streams on a primary gold mine. GMIN and Franco-Nevada have executed final documentation with respect to a definitive purchase and sale agreement under which Franco-Nevada (Barbados) Corporation will pay GMIN a deposit of $250 million to acquire a percentage of payable gold production from the mine – 12.5% of gold production over the life of mine with reduction to 7.5% after delivery of 300,000 oz of gold. Total LOM gold production will be 1.834 Moz with average annual gold production of 175,000 oz.
On top of this, the two parties have agreed for the provision by Franco-Nevada, through one of its wholly-owned subsidiaries, of a senior secured term loan in the principal amount of $75 million, and the purchase by Franco-Nevada, on a private placement basis, of approximately 44.7 million GMIN common shares at a subscription price of C$0.80 per share, for total proceeds of $27.5 million. The remainder of the $116 million equity financing includes a $68.8 million investment by La Mancha Investments S.à r.l. and a $20.0 million investment by Eldorado Gold Corporation. La Mancha Fund is one of the largest private investment funds in the mining sector.
GMIN has also agreed $40 million in equipment financing with Caterpillar Financial Services Ltd via a credit-approved term sheet, for the supply of Caterpillar rimary and ancillary mining fleet and construction machinery. Pending completion of final documentation, the Cat Financial lease financing will be available to GMIN upon a final construction decision by GMIN’s Board of Directors and other customary conditions.
Procurement to date totals $71 million, is tracking on budget, and has largely focused on major equipment for the process plant and mining equipment. This procured equipment contains significant Brazilian content. Purchase orders for equipment with long lead times have been executed to achieve the construction schedule in order to achieve production in the second half of 2024. Equipment deliveries will be staggered over time with first machines delivered to site in September 2022. Primary mining equipment is currently being funded using cash on hand, but will be refinanced through the mentioned $40 million equipment financing package.
The mine has a currently planned life of 10.5 years and will be a single pit operation with four phases with a LOM strip ratio of 3.4 and a pit slope designed using inter-ramp slopes between 49 and 55 degrees. The final pit will reach a depth of 355 m and measure 1,250 m along strike and 860 m wide. The fleet will include 26 92 t trucks, two 45 t ADTs, three 16.5 m3 hydraulic excavators, one 10.5 m3 wheel loader and two 6.5 m3 excavators. The peak mining rate will be 27.5 Mt/y with the ability to deliver 4.7 Mt/y of gold ore to the processing facility.