NexGold advances financing for Goldboro mine
Canadian firm NexGold Mining has struck a $24-million royalty deal with Appian Capital Advisory and signed a non-binding agreement for as much as $175-million in project financing, moves aimed at advancing its Goldboro gold project in Nova Scotia.
Under the royalty agreement, Appian will pay NexGold upfront cash for a 2.9% net smelter return (NSR) on all minerals from Goldboro until 1.25-million ounces of gold or gold equivalent are produced, after which the royalty applies only to gold. NexGold has the option to repurchase 1.9% of the royalty, subject to certain conditions.
Proceeds will be used to repay a $12-million debt facility with Nebari and repurchase a 0.6% NSR, leaving the company debt-free.
The deal is expected to close by the end of September, pending customary approvals, the company said on Thursday in a statement.
NexGold also signed a non-binding letter of intent with Appian for up to $175-million in senior secured credit to fund Goldboro’s construction. Appian retains the right to negotiate for up to half of any project financing within three years of the royalty closing.
“We are excited to announce this strategic partnership with Appian, a leading investor in metals and mining,” CEO Kevin Bullock said. “This royalty financing provides NexGold with important non-dilutive capital to help advance Goldboro towards construction, as well as deleverage the balance sheet.”
NexGold expects the royalty deal to strengthen its financial flexibility as it advances Goldboro toward a construction decision.
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