After announcing two pre-payment deals worth over US$21 million to kick off 2020, analysts at Noble Capital Markets are looking forward to a strong 2020 from Great Panther Mining Limited (NYSEAMERICAN:GPL) (TSE:GPR).
The Vancouver-based company kicked off the week with a US$11.25 million gold doré prepayment agreement with a Samsung subsidiary, which comes hot on the heels of a late-December offtake deal with IXM Group worth US$10 million.
In a recent research note, analysts at Noble said that the proceeds will go towards advancing the miner’s 2020 strategic initiatives.
“In our view, the terms of the prepayment agreements are appropriate and underscore the confidence that these two well-recognized industry leaders have in Great Panther Mining, its operations and management,” analysts at Noble wrote.
Great Panther’s offtake deal with IXM Group is for 100% of the gold-silver concentrates produced from the group's Guanajuato Mine Complex in 2020 and 2021 and in consideration, IXM advanced a US$10 million prepayment on December 30.
The pre-payment will be repaid on December 31, 2020 and will bear interest at an annual rate of 3-month US dollar LIBOR plus 5%.
And on Monday this week, the firm announced that in consideration of delivery and sale of approximately 3,000 ounces of gold contained in doré per month over a two-year period from Great Panther’s Tucano Gold Mine in Brazil, Samsung C&T UK Ltd has agreed to advance the prepayment.
Gold deliveries will be sold at a 0.65% discount to the benchmark price of gold at the time of delivery and will be used to offset repayments of the advance, which are scheduled to occur between 11 to 24 months after the date of the advance.
Both IXM and Samsung are respected throughout the industry and Samsung has been a source of financing for other mining companies, according to Noble.
“We believe the prepayment agreements represent a positive step forward in strengthening the company's financial flexibility and building key customer and financial relationships with industry participants.”
Noble reiterated a Market Perform rating on Great Panther’s stock, which traded at US$0.53 and C$$0.70 on Tuesday morning.
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