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Tanami Gold obtains A$37m loan to acquire Newmont's Groundrush Gold Project

Tanami Gold (ASX: TAM) recently advised that Newmont Asia Pacific had approved the sale of the Groundrush Gold Project, (to be renamed Central Tanami Gold Project) to Tanami Gold for A$22 million.

The project parameters include: 

- over 500,000 ounces of JORC Code compliant Resources;

- The 1.2Mtpa Groundrush treatment plant and extensive support infrastructure;

- A world-class 2,000 km2 exploration package; and

- 2.1 million ounces in historic production endowment within the Central Tanami Gold Project Mining Lease area.

Tanami has now finalised a loan agreement with Hong Kong based AP Finance Limited for A$37 million to pay for the Central Tanami Gold Project.  The agreement also covers associated cash backed bank guarantees required for Central Tanami Gold Project rehabilitation obligations; and additional working capital.

The acquisition is scheduled for completion for 30 March 2010.

The Groundrush Gold Project provides a significant diversification and growth opportunity alongside Tanami Gold’s 50,000oz per annum Coyote Gold Mine.

Following the acquisition, Tanami Gold is aiming to increase production from its combined tenement holdings to over 200,000oz per annum within two years.

Disclosure: The author holds no positions in the company