RMB Australia Holdings, the equity investment firm financing Sutter Gold's (TSXV:SGM) Lincoln Mine Project in California, has requested the miner cut costs if it wishes to receive further funding, Sutter announced on Wednesday.
The gold miner has let go of one-third of its Lincoln staff in order to retain and increase its bridge loan from RMB. The remaining workers will continue with the next stage of development.
"These decisions were difficult but prudent in the current market environment," said Mark Brown, Sutter Gold chairman, in a statement.
The company has also implemented changes to senior management including the replacement of its president and CEO, Leanne Baker. Richard A. Winters, president of RMB Resources Inc., will temporarily fill these positions. Baker will stay on as a board member.
In addition to these cost-cutting measures, RMB has agreed to reduce the interest rate on Sutter's loans. This will allow the firm to inject more funds into developing the ore mine.
"These cost cutting measures and focused, objective driven ongoing development reflect a required, higher level of discipline in managing the Lincoln Project's advancement going forward," said Winters. "The actions and continued funding by RMB is a significant indication of the strong support from our lender and major shareholder in the current, extremely difficult junior mining sector."
The Licoln site is located 45 miles southeast of Sacramento in the Mother Lode region of California – home of the 1848 gold rush. It is believed to contain about 650,000 ounces of gold.
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