The deal will provide the funding necessary to begin the construction of Minera’s Santana gold project in the Mexican state of Sonora.
In combination with the C$6 million equity placement completed by Osisko in January 2020, Minera said it has now received C$11 million and retains an option to further draw down an optional royalty facility of up to C$3 million. Overall, the package provided access to C$14 million.
READ: Minera Alamos says construction will continue with safety precautions in place at Santana gold project
"The strength of our partnership with Osisko has never been more clearly demonstrated than by their continued financial support during the current global uncertainty in equity markets,” said Minera president Doug Ramshaw in a statement Friday.
“We remain fortunate we can access their financial and technical resources that allow us to remain on track to transition to gold producer in late 2020. Currently, our current working capital remains sufficient to execute our previously announced construction plans at Santana."
As of March 30, the company said it had total cash of C$13.6 million and working capital of C$14.6 million with a further C$3 million available should it elect to draw down the optional royalty facility.
In other news, the company provided an operational update on the impact of the coronavirus (COVID-19) pandemic.
Minera said it has begun limited ongoing work at the Santana site to comply with a Mexican federal government mandate that all non-essential businesses temporarily suspend operations until April 30.
The current drilling program has a backlog of results to be released during the suspension of activity while heavy equipment has been mobilized to site and will be available when the suspension has lifted, the company said.
“Minera initially guided a 6- to 8- month construction time for Santana; with the slowdown of activity for the next month the company expects that construction completion may now extend towards the upper end of that guidance,” it said.
“Despite some reductions in site activity the company remains fully involved with other aspects of development including mine start-up optimization studies and the purchase of process plant and site infrastructure equipment in order to minimize any overall delays once potential restrictions are lifted.”
Contact the author: [email protected]
Follow him on Twitter @PatrickMGraham