Battle North Gold (TSX: BNAU) has entered a binding commitment letter with Macquarie Bank for a senior secured term loan facility of $40 million, which will be used to fund the construction of the Bateman gold project in Red Lake, Ontario.
Proceeds of the credit facility, together with cash currently on the company’s balance sheet, is expected to fully fund the Bateman project to commercial production.
Macquarie has completed the necessary credit approval process to issue the commitment letter. However, the credit facility remains subject to certain customary conditions precedent, and to negotiation and execution of customary definitive documentation, which Battle North and Macquarie anticipate will be completed by end of Q1 2021.
Battle North’s board of directors has granted preliminary approval for certain critical-path initial capital expenditures not to exceed C$13 million of the C$109 million initial capital cost of the project. These include portal construction and ramp development from surface, ammonia treatment plant construction, tailings management facility upgrades, and camp upgrades.
Full development of the project, including the balance of the initial capital cost, remains subject to further approval of the board following completion of the credit facility.
The company said it plans to fully repay its existing approximate C$15 million loan facility with Sprott Private Resource Lending later this week.
“We believe 2021 will be a transformational year for the company as we look, subject to board approval, to complete construction and realize first production from the Bateman gold mine,” Battle North CEO George Ogilvie said in a media release.
Shares of Battle North Gold advanced 8.3% by 1:30 p.m. EST on news of the $40 million credit facility. The company has a market capitalization of C$271.3 million.