Vancouver A newly obtained US$14-million debt facility will be used by Jaguar Mining (JAG-T) to fund construction of the Turmalina gold mine in the ‘Iron Quadrangle’ region of Minas Gerais state, near the mining town of Belo Horizonte.
Jaguar holds four advanced projects in the prolific gold-mining district, and is nearing completion of the Sabara oxide mine, expected to begin production early next year. Most of the US$14-million loan will be used at Turmalina, but up to US$2.25 million can be used to complete mine construction at Sabara.
The proposed Turmalina mine is expected to produce 60,000 oz. gold annually once up and running. The project hosts reserves of 1.9 million tonnes grading 6 grams gold per tonne, or about 370,000 contained oz. Exploration is ongoing, and is aimed at increasing resources and reserves.
Jaguar produced 16,157 oz. gold in the first nine months of this year from several small mines in the Iron Quadrangle. The company’s goal is to produce 75,000 oz. gold from the region in 2006, and boost this to more than 200,000 oz. annually by 2008.
The loan facility is secured by the Turmalina and Sabara project assets and other pledges. As part of the financing agreement, Jaguar has hedged 77,000 oz. of gold production during the loan-payback period at an average price of US$527 per oz. This equals about 7,700 oz. per quarter for ten quarters. The remaining production is un-hedged.
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