East Asia Minerals Corporation has provided shareholders with an update on the Indonesian Feasibility Study (IFS) and the credit facility for up to US$15 million.
The company has completed and submitted the IFS on the Sangihe project to the Indonesian Ministry of Energy and Mineral Resources (MEMR) and, once approved, construction of the mining facilities and infrastructure can begin at the project. The company anticipates to begin construction before the end of 2018.
The IFS is not a feasibility study as defined by the Canadian Institute of Mining, Metallurgy and Petroleum and as required by National Instrument 43-101 (NI 43-101) but is required under Indonesian law in order to obtain a license to construct a production facility. The company cautions that any production decision made by the company will not be based on a NI 43-101 feasibility study of mineral reserves that demonstrates economic and technical viability and as such, there may be involved increased uncertainty and various technological and economic risks.
Frank Rocca, BAppSc.(Geology), MAusIMM, MAIG, Chief Geologist of East Asia Minerals Corp. is the Qualified Person as defined under NI 43-101 who has reviewed and approves the content of this release.
The company has also successfully completed the legal documents required for the credit facility agreement, which was announced at the beginning of June. This milestone is subsequent to completing the due diligence process, which included a site visit to the Sangihe mine last month.
CEO Terry Filbert said: “These two accomplishments put the company one step closer to generating revenue and positive cash flow. The credit facility will enable us to begin exploration and infill drilling of the Binebase/Bawone corridor to increase both resources and reserves, as well as for general working capital.”
Credit facility terms
The company has entered into an arrangement with Isatis Capital Group of Montreal to secure a credit facility loan for up to US$15 million. The contemplated credit facility will be carried out by a private venture fund (the fund) that will make an offering to US investors (the lenders) of units comprising of promissory convertible notes and common shares of the fund (the units). The fund will then loan the company all proceeds of the units, and that loan will be secured through a mortgage granted by the company on the common shares the company holds in Sangihe Gold Corporation.
The fund’s units will be gold loans, convertible to 99.5% gold bullion at LBMA price (minus 5%) after 24 months (following a minimum 12 months advanced notice), at the sole discretion of the lenders. The units will mature at 48 months, with 8% annual interest (calculated monthly) on the outstanding principal, and will be redeemable on or before 36 months (but before 48 months) with a 2% penalty.
The Sangihe gold-silver-copper project is located on the island of Sangihe off the northern coast of Sulawesi and has an existing National Instrument 43-101 inferred mineral resource of 114 700 indicated oz and 105 000 inferred oz of gold. The company’s 70% interest in the Sangihe mineral tenement contract of work is held through PT Tambang Mas Sangihe (PT TMS). The remaining 30% interest in PT TMS is held by three unaffiliated Indonesian corporations. The term of the Sangihe contract of work agreement is for 30 years upon commencement of the production phase of the project.
Read the article online at: https://www.globalminingreview.com/exploration-development/20082018/east-asia-minerals-submits-feasibility-study-on-sangihe-project/