Tulawaka funding secured (January 14, 2002)

Minires du Nord (MDN-T) has secured a US$4-million loan facility arranged by RMB Resources, a South African-based financial institution.

The money will more than cover MDN’s funding requirements for 2002 (US$1.7 million) at the Tulawaka gold project in northern Tanzania. A total of US$5.8 million has been budgeted for about 20,000 metres of drilling and the completion of a feasibility and environmental impact study at Tulawaka. The difference will be picked up by Barrick Gold (abx-t), the operator, which holds a 70% stake in the project. Minieres holds the remainder. Barrick also retains a right-of-first-refusal on its partner’s interest, should it choose to sell it.

The US$4-million line of credit bears interest at the London Interbank Offer Rate plus 3.5%, and is repayable at the end of March 2003 or 30 days after obtaining of a mining licence, whichever comes first. Also under the deal, RBM will receive a 2.5% net revenue royalty on MDN’s share of Tulawaka’s total gold revenue, after statutory national royalties. The facility is secured by MDN’s 30% interest in the project.

MDN also intends to use a portion of the funds to repay a previous US$1.8-million loan from RMB. It will also allow for the cancellation of 3.6 million warrants issued to RMB under that facility.

The partners expect to complete a study of the East zone deposit, part of an ongoing feasibility study a Tulawaka, in mid-2002. At that point, a production decision will be made.

Mineralization in the East zone is hosted by three gold-bearing quartz veins that individually strike for up to 600 metres for a combined length of 1 km. The known resource extends no deeper than 150 metres below surface. At last report, East zone resources were pegged at 1.6 million tonnes grading 18.96 grams gold per tonne. A separate structure to the west hosts 736,678 tonnes grading 2.9 grams.