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Eurogold closes A$5m loan facility with Tanami Gold

Eurogold (ASX: EUG) has finalised a Loan Agreement with Tanami Gold (ASX: TAM) for A$5 million to primarily fund Tanami’s participation in the A$20 million ABM Resources (ASX: ABU) share placement announced to the market on 22 February 2010.

The term of loan is until 27 September 2010, or such other date as may be agreed between Eurogold and Tanami. A facility fee of A$150,000 was charged to the loan and an interest rate of 8 percent per annum applies.

To the extent permitted by law, Eurogold has taken security over Tanami’s shares in ABM and will continue to hold this security until the loan is repaid.

Following allotment of the ABM placement shares Tanami will hold up to a maximum of 444,783,334 shares in ABM and will retain its ownership percentage of approximately 21.6%.
Based on a closing share price of 2.4 cents on 26 March 2010, Tanami’s investment in ABM was valued at A$17.0 million. Eurogold holds 131,851,506 shares in Tanami, representing an interest of 3.73%.

Disclosure: The author holds no positions in the company