Loki funds Brewery Creek (September 04, 1995)

Financing is at hand for the Brewery Creek gold project in the Yukon.

Project owner Loki Gold (TSE) has formed an underwriting group to raise $25 million in equity financing. Pricing on the issue has not been established, but it is expected to take the form of a special warrant convertible into one common share.

The remaining capital for the $50-million project will be raised through N.M. Rothschild & Sons, which has agreed to underwrite a US$26.5-million credit facility.

Loki recently received a Yukon Water Licence for the project, and construction has already begun. Assuming the financing proceeds smoothly, the company expects to spend about $12 million on the project to the end of the year.

Loki plans to complete construction in 1996, with the first gold production anticipated in late August of next year.

Reserves at Brewery Creek are estimated at 16.7 million tonnes grading 1.48 grams gold per tonne, with an overall stripping ratio of 1.2-to-1.

The open-pit, heap-leach operation is expected to produce about 80,000 oz. gold per year over an 8-year mine life. The cash cost per ounce is projected at US$173 per oz.

Loki has 28.8 million shares outstanding (32.9 million fully diluted) and $1 million in working capital.