Tulawaka funding secured (December 21, 2001)

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 year 2002 funding requirements (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. Minires 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 a rate of LIBOR 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 revenues royalty on MDN’s share of Tulawaka’s total gold revenues, after statutory national royalties. The facility is secured by MDN’s 30% interest in the project.

MDN also intends to use the facility 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 feasibility study is underway and the partners expect to complete the study of the East zone deposit 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.