LONDON (Alliance News) - Shanta Gold Ltd Tuesday said it has signed a deal with Investec Bank Ltd that will provide it with USD40 million of debt finance, a move designed to lower its cost of funding.
The East Africa focused gold production and exploration company said the deal was signed through its Shanta Mining Company Ltd operating facility.
The company will use USD20 million of the facility to refinance an existing loan from FBN Bank (UK) Ltd. The remainder will be kept on standby "to be used as and when required".
The loan facilities have a five year tenor and bear interest at a rate of London interbank offered rate benchmark plus 4.9%.
"The facility, together with the company's operating cash flow, place Shanta Gold in a healthy position as it enters an exciting period with the extension of the Life of Mine at New Luika through opencast and underground mining and looks at other growth opportunities," Mike Houston, who will be replaced by Toby Bradbury as chief executive in April, said in a statement.
Shanta shares were down 2.5% at 9.02 pence on Tuesday afternoon.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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