Guyana Goldfields (GUY.TO) has announced it secured $185M in debt and is raising $44M in equity to fund the construction works at its Aurora project in Guyana, South America. Its lead arrangers have obtained credit approvals from, amongst others, ING Bank (AMS:INGA, NYSE:ING) and the Bank of Nova Scotia (BNS.TO, NYSE:BNS) for a $160M debt facility and a $25M cost overrun facility. The positive thing is that no gold hedge was required by the lenders, and the terms of the debt facility are very reasonable as it seems like the $160M will be issued at 3M LIBOR + 6% and the $25M overrun facility at 3M LIBOR +6.5%. This might sound expensive but is actually very reasonable, considering Guyana isn’t exactly a top-tier country like Canada or the USA is.

This debt facility allows the company to remain on track to reach the commercial production phase at Aurora halfway 2015.

> Click here to read the press release

Disclosure: The author holds no position in Guyana Goldfields. Please see our disclaimer for current positions.

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