(Alliance News) - Shanta Gold Ltd on Thursday said that it will restructure its outstanding unsecured subordinated convertible loan notes due April 2020, extending the maturity by one year.
The restructuring of loan notes will also allow the company to redeem the notes, in whole or in part, if it chooses to do so. The Tanzania-focused gold miner has received undertakings from 77% of loan note holders to approve the restructuring proposal.
Shanta Gold Chief Executive Eric Zurrin said: "Management and the board took the decision to defer the repayment of convertible loan notes in order to maximise financial flexibility ahead of making the payment to Barrick for the West Kenya acquisition announced last week.
"Today's announced convertibles restructuring allows Shanta the option to repay the loan note holders earlier than twelve months, if we so choose," Zurrin added.
Barrick Gold Corp on Monday last week agreed to sell its West Kenya gold exploration project to Shanta Gold for USD7.0 million in cash, approximately USD7.5 million in Shanta shares and a 2% life-of-a mine net smelter return royalty relating to the project. Following completion of the deal, Barrick will become Shanta's fifth-biggest shareholder, with a 6.4% stake.
The West Kenya project has an inferred mineral resource of 1.2 million ounces of gold, at a grade of 12.6 grams of gold per tonne of ore. It covers 1,161 square metres on the Lake Victoria goldfield in north-western Tanzania and south-western Kenya.
Shanta Gold shares were down 0.2% at 12.37 pence each in London on Thursday.
By Tapan Panchal; tapanpanchal@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Shanta Gold (SHG)