Aus gold miner Ramelius refinances for $160M in debt

Australian gold miner Ramelius Resources (ASX: RMS) has secured a A$175 million ($160 million) revolving debt facility, along with government grants, to fund its operations and recent acquisitions.

Banks including Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank, Natixis and Westpac Banking agreed to back Ramelius, the miner said on Wednesday. 

The initial loan term is four years with the option to extend it for an additional year. This new facility, which has not been utilized yet, is an increased replacement for the previous A$100 million facility.

“While Ramelius has a strong balance sheet and we generate significant operating cash flow, we feel it is important to have the added financial flexibility, which this low-cost revolving debt facility provides us,” managing director Mark Zeptner said in the statement.

The announcement comes only a day after the company said the Australian Retirement Trust had boosted its stake in Ramelius to 6.04% from 5.01%.

M&A 

The gold producer acquired last month an 8.9% stake in rival Spartan Resources (ASX: SPR), which is developing the Dalgaranga gold project in Western Australia.

Previously, it attempted to take over Canada-based Karora Resources (TSX: KRR), which owns the Beta Hunt gold mine and Higginsville gold operations in Western Australia. The parties ended talks with no agreement reached.

The company tried its luck again in May. This time, it disclosed a merger bid for Westgold Resources (ASX: WGX) that had been in the works for month. Negotiations didn’t succeed and in the meantime, Westgold merged with Karora — Ramelius’ previous interest.

Shares in the company rose 1.6% on Thursday in Sydney to close at A$1.90 each. This leaves the gold miner with a market capitalization of A$2.17 billion.