Silver Bear Resources and its wholly owned subsidiary Prognoz will secure a funding from Inflection Management and AB Aterra Investments for the final development, construction and commissioning of the Mangazeisky silver project in Russia.
Pursuant to the agreement, the lenders will provide $55.2m in loans comprising three tranches to the company and its subsidiary.
Tranche A will consist of a term loan facility of $43.2m, Tranche B will comprise a $10m working capital facility, and Tranche C will include a facility of $2m.
“Finalising this agreement is a significant milestone for the company.”
Silver Bear Resources CEO Graham Hill said: “Finalising this agreement is a significant milestone for the company and major catalyst in providing the financial support to advance Vertikalny towards commissioning in the fourth quarter of this year.”
Silver Bear plans to use a portion of the loan facility to repay the principal and accrued interest on certain outstanding promissory notes that were issued by the company to the lenders earlier.
The loan will also result in net new funding of approximately $22m to the company and Prognoz, following the repayment of the promissory notes.
The project covers a licence area of roughly 570km², which includes the Vertikalny deposit located 400km north of Yakutsk in the Republic of Sakha.
In September 2013, the company secured a 20-year mining licence for the deposit and later completed a feasibility study in the second quarter of this year.
The company plans to complete major construction of the Mangazeisky silver project by the end of this year with production planned to start in the first quarter next year.