Augusta offered $50M loan to build Nevada gold mine

Augusta Gold (TSX: G; US-OTC: AUGG) has received a letter from the Export-Import Bank of the United States (EXIM) expressing its interest in providing up to $50 million for the company’s construction-ready Reward project in Nevada.

The letter outlines EXIM’s preliminary interest in providing a “direct, competitively priced loan” with a potential 10-year repayment term, including an interest-only period, the Vancouver-based gold developer said on Monday. 

The Reward gold project in Nye county about 200 km northwest of Las Vegas is fully permitted ahead of building a conventional open-pit, heap-leach operation. It’s expected to have an initial cost of nearly $90 million, plus $32 million in sustaining capital.

The Reward project is located along the prolific Walker Lane Trend — which has emerged as a hotbed for gold exploration due to its rich production history and discovery potential. Work to date on the property has delineated an estimated 370,000 oz. in reserves grading 0.86 gram per tonne.

According to a feasibility study released last September, the Reward project is expected to produce about 39,000 oz. a year, with peak annual production of 47,000 oz., over a 7.6-year life. First production could occur as early as this fall, pending funding, the company has said.

Policy goals

The project meets EXIM’s policy goals of job creation and required export nexus, according to the bank. The letter cited Augusta’s experienced management team and potential support from state and local governments.

“This letter of interest from EXIM for over 50% of the project construction cost, marks a significant milestone for Augusta Gold and underscores the strategic importance of the Reward project to domestic mineral production and economic development,” Don Taylor, CEO of Augusta Gold, said in the statement.

Once built, Reward would be Augusta’s first mine operation in a highly prolific gold district of Nevada. Moving forward, the Reward project is likely to be integrated with the company’s larger Bullfrog project located 11 km to the northwest.

“Our goal is to be a low cost, 150,000 oz. per annum producer in Nevada by 2027,” Taylor has said.

The Reward project is one of several projects for which the EXIM has lined sizeable loans. Also on Monday, the bank expressed its interest in funding the Tanbreez rare earth project in Greenland and the K.Hill manganese project in Botswana.

Shares of Augusta Gold closed Monday’s session in Toronto 4% higher at C$1.02 apiece, for market capitalization of C$87.7 million.