Future of K92 mine looks promising [for foreign profiteers]
Post Courier | 08.02.2016
THE future of Kainantu Mine in Eastern Highlands Province now looks promising with developer K92 Holdings International Limited eventually securing a funds for the project.
Otterburn Resources Corp, last Friday, announced its subsidiary K92 entering into financing agreements with CRH Funding II Pte. Ltd. (CRH), an affiliate of Cartesian Royalty Holdings and Cartesian Capital Group.
K92 CEO Ian Stalker said progress of Financing are expected to be used to refurbish and bring Irumafimpa, one of the gold-copper deposits of the Kainantu Gold Project, back into production in 2016.
“Kainantu Gold Project is an attractive gold mine restart project with existing infrastructure in place and is coupled with almost 400sqkm of adjacent prospective exploration properties.
“We have now attracted a supportive financial partner to assist us in our restart,” he said. After extensive due diligence including time on site, Cartesian has decided to move forward with K92 as we advance this very unique opportunity.
The financing has been structured in a way that is less dilative to the K92 share structure than a traditional equity investment, and involves the prepayment of gold, based on a percentage of our production from Irumafimpa.
This agreement entered consists of a gold prepayment investment and an equity investment.
Under the gold prepayment agreement (GPA), CRH has committed to provide K92 with up to US$4.8 million over four (4) tranches in exchange for a percentage of gold produced at Irumafimpa over a 36 month period, subject to a minimum of 18,000 ounces of gold and a maximum of 20,000 ounces of gold.
CRH has advanced K92 the first tranche of US$962,795 under the GPA.
The remaining tranches will be advanced upon K92 fulfilling certain technical milestones and other conditions, including the initiation by February 29, 2016 of the previously announced reverse take-over transaction with Otterburn (RTO).
In addition to the advances under the GPA, CRH has committed to an equity investment of up to CDN$3.5 million.