Pacific Trans Ocean secures gold loan for Ketza project

An $8.8-million(US) gold loan has been arranged by Pacific Trans Ocean Resources through Lloyds Bank plc of New York. The proceeds will be used to retire short term credit facilities and for preproduction and working capital requirements at the Ketza River gold project near Ross River, Yukon.

Toronto-based Canamax Resources is operator for the project and a 50% joint venture partner. Mill tune-up was scheduled to begin earlier this month and full production (350 tons per day) is slated for June. During the mine development stage, ground conditions were found to be better than anticipated which could lead to lower mining costs, says Canamax.

The gold loan will be repaid by June 30, 1992, in 16 quarterly instalments from production. But there is a prepayment option which begins Dec 31, 1989. The interest rate is 3% for the first two years and from 2.5% to 4% for the remainder of the term. Future production has been hedged against possible declines in gold prices without limiting gains from price increases through the facilities of Lloyds Bank. “This will ensure that loan payments and operating costs will be met for the duration of the gold loan at anticipated levels of production and costs,” says Pacific Trans Ocean.