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GoGold Resources (TSX:GGD) received US$40 million from Red Kite Mine Finance Funds for the construction of the junior’s Parral Tailings Project located in Chihuahua State Mexico.
GoGold, which announced the financing on Friday, says it now has US$55 million in its treasury. The company anticipates that its Parral Tailings Project will cost US$35 million to develop. Remaining funds will be used for exploration.
The project is a 141 hectare property that is host to a large tailings left over from over Mina La Prieta mine, which operated for over 300 years. GoGold says inefficient recovery left significant gold and silver behind, 214,000 ounces gold and 26,400,000 ounces silver mineral resource.
GoGold completed a pre-feasibility on the project in Feb. 2013.
The funds from Red Kite, a company that provides mining companies with project financing and metal off-take agreements, was a mixture of debt and equity.
The equity investment of US$5 million is to be priced at a 5% premium to the 20-day volume weighted average stock price of GoGold preceding the closing date. The senior secured loan component of US$30 million bears interest at Libor plus 6.5% with the equal quarterly payments over a three year period beginning on September 30, 2014.
Parral tailings project is located in Chihuahua, Mexico, about 2 km NNE of Hidalgo Del Parral.
Creative Commons image of two geologists by Hitchster
