The loan is intended for the development of the company’s 100 percent owned Hemi gold project in the Pilbara region, which De Grey says has the potential to be a large-scale, low-strip-ratio and low-cost open-pit operation.
The funds will form part of a lending syndicate that is expected to provide a AU$1 billion senior debt facility and a AU$130 million cost overrun facility. Along with De Grey’s existing cash balance, this money is anticipated to be enough to finance Hemi’s development. The company said it has received credit-approved terms from local and international commercial banks that can support the targeted funding levels for the debt facilities.
“We appreciate the strong support for the development of Hemi shown by NAIF and would like to acknowledge the important role played by the Minister for Resources and Northern Australia, Hon. Madeleine King MP and the Special Envoy for Northern Australia, Luke Gosling OAM,” commented Glenn Jardine, managing director of De Grey.
“This funding is part of more than AU$4.5 billion committed by the Australian Government through NAIF to spur development across a range of industries in the north,” added Gosling.
Included in the terms agreed on by De Grey and NAIF is the commitment to continue engaging with the Kariyarra People, the native title holders of the land on which Hemi is located, and to drive positive outcomes for traditional owners.
“(The project) will also support the preservation of Aboriginal cultural heritage and land management through the establishment of a ranger program within Kariyarra country around the Hemi area,” said Jardine.
De Grey is aiming to finalise all documentation for the debt facilities by December of this year. A final investment decision will follow depending on when the company receives final environmental approvals.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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