{"id":1105716,"date":"2019-03-15T21:21:03","date_gmt":"2019-03-15T21:21:03","guid":{"rendered":"http:\/\/resourceworld.com\/?p=55146"},"modified":"2019-03-15T21:21:03","modified_gmt":"2019-03-15T21:21:03","slug":"continental-gold-unveils-us175-million-financing","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1105716","title":{"rendered":"Continental Gold unveils US$175 million financing"},"content":{"rendered":"
\"\"<\/a><\/p>\n

Construction Photos from the Buritic\u00e1 Project Source: Continental Gold<\/p>\n<\/div>\n

Continental Gold Inc.<\/strong> [CNL-TSX; CGOF-OTCQX] on Friday March 15 announced details of a US$175 million financing package that will be used in part to fund the advancement of its Buritica Project in Colombia.<\/p>\n

Continental shares rallied on the news, jumping 15.4% or 40 cents to $3.00 on volume of 1.18 million shares. The shares trade in a 52-week range of $1.76 and $3.98.<\/p>\n

A 19.9%-owned affiliate of Newmont Mining Corp.<\/strong> [NEM-NYSE], Continental Gold is an advanced-stage exploration and development company with an extensive portfolio of wholly-owned gold projects in Colombia.<\/p>\n

Continental said the financing package consists of US$75 million of unsecured convertible debentures that were issued to certain investors, including a US$50 million debenture from Newmont, and a US$100 million gold and silver stream from Triple Flag Mining Finance Bermuda Ltd.<\/p>\n

The 75,023-hectare Buritica property is Continental\u2019s flagship asset. It contains several known areas of high-grade gold and silver mineralization, of base metal carbonate-style variably overprinted by texturally and chemically distinctive high-grade mineralization.<\/p>\n

Mineral reserves on the property currently stand at 3.7 million ounces of gold, grading 8.4 g\/t and 10.7 million ounces of silver, grading 243 g\/t.<\/p>\n

That material is expected to support an average annual production rate in the first five years of 282,000 ounces of gold at a life-of-mine at an all-in sustaining and construction cost of US$604 an ounce. Production is scheduled to commence in early 2020, the company has said.<\/p>\n

According to a February, 2016, feasibility study, initial capital costs are pegged at US$389.2 million. Total project costs were estimated at between US$475 million and US$515 million.<\/p>\n

In a January 28, 2019 press release, Continental said an updated mineral resource estimate for the project is progressing well and ahead of schedule.<\/p>\n

The project remains on schedule for construction completion and first gold pour in the first half of 2020, the company said. Ramp-up to commercial production is anticipated approximately six months thereafter.<\/p>\n

Debenture details<\/strong><\/p>\n

The five-year and two-month debentures feature a 5% interest rate payable semi-annually in arrears.<\/p>\n

Each of the debentures will be convertible at the holder\u2019s option into common shares of the company at a conversion price of $3 (Canadian) per share. Assuming full conversion of the debenture issued to Newmont only, Newmont\u2019s stake in the company would rise to 28%.<\/p>\n

The company has the option to redeem all of the debentures at a redemption price equal to 100% of the principal amount then outstanding, plus all accrued and unpaid interest, if the closing price of the shares on the TSX is at least 130% of the conversion price for each of the 20 trading days before a notice of redemption is delivered to the holders, subject to the terms of the debentures (including the right of holders to convert prior to redemption).<\/p>\n

Gold and silver stream<\/strong><\/p>\n