Galane Gold Ltd, the unhedged gold producer said it has successfully renegotiated the repayment terms of both the loan facility and gold prepayment arrangement provided by Samsung C&T U.K. Limited (as detailed in the Company’s press release of August 25, 2014) and the outstanding royalties due to the Government of Botswana.
The renegotiated terms are aimed at ensuring that Galane continues with the development of
The Tau Underground during 2016, as currently planned, even in the current depressed gold price environment.
Galane said the current schedule of 10 remaining monthly installments of $277,000 and one monthly installment of $291,000 has been amended to a repayment of 12 installments of $20,000 per month effective from October 2015, followed by 9 installments of $277,000 and a final installment of $328,000 in July 2017.
Also, in each month during the repayment period, Mupane must deliver at least 1,607 ounces of gold at a price for the gold selected by Samsung from any one of the four London Bulletin AM or PM dollar gold fixing prices falling either on the delivery date or on the day immediately following the Delivery Date, less a discount of 1.25 per cent.
Another agreement is that in each month following the repayment period and for such period as gold doré is produced Samsung will have the right to request delivery of all gold doré produced from the Tau ore body and the low grade stockpiles.
“In each case the price for the gold produced can be selected by Samsung from any one of the four London Bulletin AM or PM dollar gold fixing prices falling either on the delivery date or on the day immediately following the delivery date, less a discount of 2.00 per cent.”
The wording has also been amended so that in each month following the repayment period Samsung has been provided with the right of first refusal to purchase all gold produced from the Company’s operations in Botswana on terms that are no more favourable than offered by a third party and the rate of interest on the outstanding balance is three (3) per cent per annum, compounded annually.
In addition, the company has agreed with the Government of Botswana that the royalties due on gold will continue to be deferred until June 2016. The amount deferred will then be repayable over 12 months commencing July 2017.
“It is another vote of confidence in Galane Gold, and its management team, that both Samsung and the Government of Botswana have agreed to continue to support us in our aim to complete the development of Tau underground and our transition to an underground operation,” Galane Gold CEO, Nick Brodie said.