Source: Mining.com
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  • Argonaut Gold (AR) has confirmed the estimated cost to completion of its 100-per-cent-owned Magino project and announced a funding package
  • The company has received a binding commitment letter from a syndicate of lenders for the financing of a six-year, US$200-million, term-loan credit facility
  • It has also received a three-year revolving credit facility of $50 million for a total debt facilities limit of $250 million
  • Argonaut intends to use the proceeds of the facilities to refinance its existing debt and for general corporate purposes
  • Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production
  • Argonaut Gold Inc. was down 15.19 per cent trading at C$0.67 at 9:47 AM ET

Argonaut Gold (AR) has confirmed the estimated cost of completion of the Magino project and a funding package to finance the project’s construction.

The company recently completed a detailed review of the estimated cost to completion (EAC) of its Magino project and now estimates the EAC to be approximately C$920 million. This is an increase of C$120 million from the December 14, 2021 EAC of C$800 million.

As at May 31, 2022, Argonaut Gold had committed approximately C$659 million and had incurred approximately C$473 million. It estimates the project is approximately 50 per cent complete and that the project remains on schedule for first gold pour by the end of March 2023.

Furthermore, the company has received a binding commitment letter from a syndicate of lenders for financing a six-year, US$200-million term-loan credit facility and a three-year revolving credit facility of US$50 million, for a total debt facilities limit of US$250 million.

Argonaut intends to use the proceeds of the facilities to refinance its existing debt and for general corporate purposes, including ongoing development and expansion capital of the Magino project in Ontario, Canada and other producing assets.

“Magino is a long life, low cost mine in an outstanding mining jurisdiction,” said Larry Radford, President and CEO of Argonaut.

“This debt financing arrangement, along side the proposed equity financing, will put Argonaut Gold in a strong financial position to complete the Magino project and move it forward into production by the end of Q1 2023,” he added.

The term loan facility of US$200 million is a six-year term. It is to be repaid in 20 quarterly principal repayments equal to 5.0 per cent of the outstanding balance commencing on September 30, 2023, with no penalty for voluntary prepayment.

The revolving credit facility of US$50 million is a three-year term.

The facilities will bear an annual interest rate of 1.25 per cent on the committed but undrawn portions and a rate on drawn amounts equal to the Adjusted Term Secured Overnight Financing Rate plus 6.00 per cent annually.

US$80 million from the facilities will be available at closing to refinance existing secured debt, with additional draw-downs available following satisfaction of conditions precedent.

Closing is expected by the end of August 2022.

In addition, the company is commencing a marketed offering of common shares.

The net proceeds of the offering will be used for the development of the Magino Project and for general corporate purposes.

Argonaut Gold is a Canadian gold company engaged in exploration, mine development and production.

Argonaut Gold Inc. was down 15.19 per cent trading at C$0.67 at 9:47 AM ET.

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