Business & Finance
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Published in Business and Finance on Thursday, April 2nd 2009 at 13:12 GMT, Last Modified on 2009-04-02 13:12:53 by Market Wire
TORONTO, ONTARIO--(Marketwire - April 2, 2009) - Centamin Egypt Limited ("Centamin" or "the Company") (TSX:CEE)(ASX:CNT)(AIM:CEY) today announces it has entered into an agreement with Macquarie Bank Limited ("MBL") to provide a corporate loan facility of up to US$25 million (the "Facility").
It is the Company's intention that development of the Sukari Gold Project will be funded out of existing cash resources and internally generated cash flow however the Facility provides the Company with access to additional funds at a low cost for future use, if required. The Facility is to be made available to the Company, however at this point will remain undrawn. Following the completion of a C$60 million bought deal in February 2009, Centamin has a strong balance sheet and currently has sufficient funding for the completion of the Sukari Gold Project, underground development, exploration expenditure and working capital requirements. Progress at the Sukari Gold Project has continued in line with expectations and the Company continues to expect first production in the second quarter of 2009.
The Facility is subject to final documentation, and drawdown on the Facility is subject to standard financing terms and conditions. In the event of any drawdown on the Facility, Centamin will not be required to enter into any hedging arrangements and the Facility does not impose any restrictions on the future development and operation of the Sukari Gold Project. In return for entering into this agreement, Centamin will issue 1,630,150 unquoted share options to MBL, exercisable at a price of A$1.20 and expiring 31 December 2012, subject to regulatory approval.
Commenting on the loan facility, Josef El-Raghy, Managing Director/CEO of Centamin, stated:
"Though Centamin has significant headroom on its balance sheet to finance the full development of the Sukari Project through to commercial production, we felt it was prudent to secure the loan facility at negligible cost, in this low interest rate environment, leaving the company in an even stronger financial position. We look forward to updating shareholders on the significant progress of the building of the Sukari mine."
Centamin is a mineral exploration and development company that has been actively exploring in Egypt since 1995. Centamin's principal asset is the Sukari Gold Project, located in the Eastern Desert of Egypt. The Sukari Gold Project is at an advanced stage of development, with construction having commenced in the second quarter of 2007. First gold production is expected by the end of the second quarter of 2009.
The Sukari Gold Project will be Egypt's first modern gold mine and has a current resource of 9.39Moz Measured and Indicated, and 3.5Moz Inferred. Completion of mine development includes a processing plant with initial throughput capacity of 4M tonnes per annum.
