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Sep.24,2010Vancouver-based Petaquilla Minerals has completed a $45-million prepaid forward gold purchase agreement with Deutsche Bank.
24th September 2010
TORONTO (miningweekly.com)
The company, which started production early this year at its Molejon gold project, in Panama, will deliver 66 650 oz of gold to Deutsche Bank over a five year term.
The company will receive an additional cash payment for gold pricing above $875/oz, up to a maximum of $1 290/oz.
The ounces committed represent only about 6% of the firm’s total resources, Petaquilla said.
The company entered into the deal as part of a plan to redeem its outstanding notes.
The net proceeds will be used to redeem $39,95-million of outstanding notes plus accrued interest, and $2-million will go towards working capital.
Petaquilla said it intends to retire its remaining debt “in the near future”, and has received a term sheet from Deutsche Bank to refinance the remainder of the debt.
It is also in negotiations with other financial institutions and interested parties.
“The closing of this forward gold purchase agreement will allow us to focus on optimising production at our wholly-owned Molejon gold project, as well as to further define a number of prospective gold and copper bearing targets in the Oro Del Norte exploration concession in central Panama,” executive chairperson Richard Fifer commented.
“We are very pleased with the confidence Deutsche Bank AG has clearly shown in our projects.”
In connection with the agreement with Deutsche Bank, Petaquilla has made a number of appointment changes, including the resignation of director Daniel Small, Fifer‘s move from non-executive to executive chairperson, and the appointment of Rodrigo Esquivel as president of the company.
Joao Manuel will continue as CEO.
Edited by: Liezel Hill
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