(Alliance News) - Shanta Gold Ltd said Wednesday Singida Resources PLC has entered into a non-binding term sheet for a USD10 million loan facility.
Shanta said the financing is planned in connection the Singida's initial public offering in Tanzania. The facility - with a privately-held, East African, multi-national conglomerate - is conditional on Singida raising a minimum of USD15 million at its IPO.
Singida is hoping to raise USD20 million from the listing.
The facility will be repaid over a period of three years from cash flows generated by the project and bears an annual interest rate of 10%.
Shanta announced in March the financing of the Singida project will be done so by the listing of project holding company Singida Resources PLC to the Dar es Salaam Stock Exchange in Tanzania.
Shanta expects to retain a 51% interest in Singida and will operate the project.
"The project's Environmental Impact Assessment Certificate has now been received from the Minister of State in the Vice President's Office for Union Affairs & Environment. This marks an important milestone for the future construction and operation of the project," Shanta added.
Shares in Shanta Gold were 1.4% higher in London on Wednesday at 9.02 pence each.
