While the All Ordinaries (ASX: XAO) is in reverse today, the Kingsgate Consolidated Limited (ASX: KCN) share price has accelerated.
This comes after the company provided an update regarding the restart of its Chatree Gold Mine before midday trade.
At the time of writing, the gold miner's shares are up 20% to $1.41 apiece.
In comparison, the All Ords is currently down 1.25% to 7,353.5 points.
Let's take a look at what the company announced to the ASX today.
Kingsgate secures funding for Chatree Gold Mine
In its statement, Kingsgate advised it has secured a US$15 million (A$20 million) bridge facility from Taurus Mining Finance Fund.
With funding approved, Kingsgate will swing its plan in action to support the refurbishment and restart the Chatree Gold Mine.
In particular, the bridge facility will be used for the following:
- General working capital for the Kingsgate Group
- Costs associated with the recommissioning of the Chatree Project such as long lead items, and the recruitment of technical site personnel
- Chatree regional exploration programs
Kingsgate stated that it anticipates the first tranche of funds will be available for drawdown in April. This is, however, subject to the completion of certain conditions including final due diligence from the lender.
Under the terms of the agreement, the bridge facility must be repaid within 12 months of refinancing. The agreed interest rate is set at 9% per annum.
In addition, to ensure adequate funding, Kingsgate is currently negotiating a project facility of US$30 million (A$41 million) with the lender.
These funds will be allocated towards a number of items. This includes:
- Capital expenditures for the development and recommissioning of the project
- Fees, costs, expenses and capitalised interest due under the bridge facility or project facility
- Working capital
- Repayment of the bridge facility
Furthermore, a scoping study has been prepared by an international engineering firm that focuses on bringing plant #2 online.
Estimates from the study indicate that plant #2 could be operating within four to six months from commencement of refurbishment. This means that the first gold pour could be achieved before the end of this calendar year.
Kingsgate executive chair, Ross Smyth-Kirk commented:
Attaining this finance will enable the company to immediately start moving towards the restart of the Chatree Gold Mine as approved by the Thai Government, and it has been achieved without diluting shareholders.
Kingsgate share price snapshot
Since this time last year, the Kingsgate share price has rocketed by almost 50%. However, the same cannot be said for the year to date, with its shares down 30% so far.
Based on today's price, Kingsgate presides a market capitalisation of about $297.68 million and has approximately 221.32 million shares outstanding.
