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Kalgoorlie Mining Company looks to North America for debt funding for Bullant gold mine expansion

Fresh from announcing a 68% boost to 250,000 ounces at the Bullant Gold Project just last week, Kalgoorlie Mining Company (ASX: KMC) has now initiated a debt funding process.

The company kicked off a North American institutional process to secure up to US$35 million of non‐convertible debt funding.

The potential funding injection would be used for a two‐phase gold mill construction and mine expansion at Bullant, which is strategically located north-west of Kalgoorlie in Western Australia.

The gold mill will consist of a 1,200,000 tonne per annum primary crusher, gravity circuit, 1600Mw ball mill, leach and absorption tanks (NASDAQ:CIL), electrical and MCC.

The gold mill will have a nameplate capacity of 700,000 tonnes annually.

The approval processes for the gold mill development has already commenced and phase one (crushing circuit) approval is expected by the end of the December quarter.

Kalgoorlie Mining said that the final terms and conditions of the proposed debt funding (including interest rate, repayment terms and fees) will be determined at the time of the pricing of any proposed offering.

The company though makes no representation as to whether this process will result in financial closure.


Transition into a cash generating gold miner

In another plus for Kalgoorlie Mining, less than a month ago the company transitioned into a cash generating gold miner with the first cash flows generated from trucking and sale of ore from Bullant, via a gold ore agreement with Barrick Mines' (NYSE: ABX) Australian subsidiary.

Gross revenues of around A$2.1 million were generated from the delivery of 10,507 dry tonnes of ore to Kanowna Belle, before haulage and processing costs.

The 1,241 gold ounces recovered were at an average grade of 3.95 grams per tonne, at a provisional recovery of 93%.

Importantly for the profitability of future ore deliveries, the company said grades are expected to increase with the commencement of open stope mining.