Goldplat agrees $2m loan facility

AIM-listed African gold producer Goldplat has agreed to a $2m uncommitted, on-demand, revolving pre-export loan facility with Scipion Active Trading Fund to fund the expansion of a processing plant.

The loan facility is available for a period of 360 days from the date of first drawdown and the term can be extended or the size increased.

Goldplat said that to date, the processing plant expansion at the Kilimapesa Gold mine in Kenya has been funded out of internally-generated operating cash flows.

With stage one of the expansion commissioned, the company has decided to arrange the loan facility to recapitalise the group's subsidiaries that have financed the work to date, and to fund the expenditure of stage two of the processing plant expansion.

Stage two is set to bump up gold production at Kilimapesa from 60 tonnes a day to 120 tonnes, with a target of achieving an annualised production rate of around 4,500 ounces of gold.

Chief executive officer Gerard Kisbey-Green said: "We stated in our interim results announced on 20 February 2017 that we were looking at various forms of debt capital raising with a view to restructuring the group balance sheet and I am very pleased to have agreed this loan facility with Scipion.

"We will use the funds initially to complete stage two of the processing plant expansion at Kilimapesa and to repay the capital made available to Kilimapesa Gold Limited from other group subsidiaries for goods and services rendered. The result will be a cleaner and more appropriate group capital structure and availability of working capital for our recovery businesses."

At 1545 GMT, Goldplat shares were up 1.7% to 7.50p.