Minera Alamos Inc (CVE:MAI) (OTCMKTS:MAIFF) said Wednesday that it has obtained C$2 million in early funding for the La Fortuna gold project in Mexico under its lending agreement with Osisko Gold Royalties Ltd (TSX:OR).
Toronto-based Minera said in a press release that most of the funds will be used to make a payment to Mexico’s environmental ministry for permits at the La Fortuna project in Durango, Mexico.
READ: Minera Alamos gearing up for construction decision on Santana gold project in first quarter next year
Under a royalty option, the secured senior convertible loan from Osisko can be converted into a 1% net smelter return, according to Minera.
“We are appreciative of the support provided by Osisko Gold Royalties allowing for us to meet the permitting payment deadlines,” Minera CEO Darren Koningen said in a press release. “We can now look forward to 2019 and the beginning of site preparation work leading to a construction decision later in the year.”
The loan, according to the companies, has a maturity date of 18 months from the date of issue with interest equal to the London interbank offered rate plus 8.5%. Osisko can call the loan earlier at its discretion.
Minera has issued 200,000 common share purchase warrants, with each warrant entitling Osisko to acquire one common share at C$0.30 during the term of the loan.
“We are pleased to provide continuing support to the efforts of the Minera Alamos team as they successfully advance the La Fortuna gold project,” Osisko CEO Sean Roosen said in a statement.
Shares of Minera fetched C$0.10 in Wednesday’s Canadian trading. Osisko climbed C$0.10 to C$10.67.
Contact Dennis Fitzgerald at [email protected]