Cleveland Mining (ASX:CDG) has secured A$10 million investment facility with Boston-based Baycrest Capital, that would allow it to develop its Brazilian gold and iron ore projects.
The financing agreement provides Cleveland with right but not the obligation to draw under the facility during its three year term and gives it access to well priced capital to develop its Brazilian assets.
David Mendelawitz, Cleveland's managing director said that securing the facility underscored support for the company's development.
"We are set apart from other juniors in that we are a gold producer with multiple options to further expand our production and resource supply base.
"This new source of funding gives the Company confidence to continue its Brazilian development, which includes the optimisation of the Premier JV Mine and plans to start mining at the nearby and soon to be gazetted, O Capitão deposit," he said.
Key financing terms
Financing will be in individual tranches of up to A$500,000 each or any such amount agreed to between the two parties and each drawdown will be matched by an issue of ordinary shares priced at 100% of a weighted average market price formula.
The facility also provides the company with the latitude to assess its optimal funding sources without binding it to any periodic drawdown obligations.
As part of the financing agreement, Cleveland Mining will pay an initial 2% fee in shares on the total funding commitment and a 5% commission fee for each tranche that is drawn.
The company has two project hubs in Brazil, with the Crixas Hub in Goias State in Central Brazil gold focused and the Amapa Hub in Amapa state in northern Brazil iron ore focused.
The high potential projects in the states of Salvador da Bahia and Mina Gerais comprise more than 1,200 square kilometres and have shown potential for a substantial amount of iron ore with grades typical of Brazilian product.
Its most advanced project is the Premier Gold project, also in Brazil, where mining and processing are underway. Already gold production at the mine is debt free and Cleveland has outlined multi-million ounce potential for development in surrounding project areas within the Crixás Hub.
Its Mara Rosa gold project, which is around 100 kilometres from Premier, also has significant potential to host mineralisation similar to Amarillo Gold Corporation's (TSX-V: AGC) nearby Posse deposit.
The A$10 million investment facility is represents a significant funding boost for Cleveland Mining, which can choose to draw on the facility to grow its Brazilian portfolio.
The securing of the capital from Baycrest Capital is a further proof of pudding in Cleveland's ace management team as well as investor perception of the revenue potential of its Brazilian gold and iron ore projects.
Already, the Premier Gold project has progressed from a brownfields acquisition to gold production in less than 3 years and with low capex and opex, the mine is likely to produce 20,000 ounces of gold per year.
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