Gold producer Austral Gold (ASX:AGD) has secured a new unsecured short-term loan of up to US$3 million from its largest shareholder, Inversiones Financieras del Sur S.A. (IFISA).
The $18.98 million market capitalisation company says the loan term is for 6 months and may be repaid earlier at its option. The funds are expected to be used for working capital
Austral reports the loan has an interest rate of 9% per annum.
The company says its board, with the exception of the interested directors who excused themselves from the company’s decision making, considered advice from a ‘third-party expert’ that the terms are as favourable as or more so than if the parties were dealing at ‘arm’s length’.
Austral also notes that the terms of the US$1 million in loans provided by 2 of its directors, Eduardo Elsztain and Saúl Zang, announced on 13 March 2023, have been amended.
The maturity date of this $1 million loan is now 31 December 2023 with an interest rate of 9%, effective 1 September 2023.
Austral Gold is an ASX-listed gold and silver explorer and producer with a portfolio of ‘high-quality’ assets in the Americas.
The company’s currently active operations include the Guanaco/Amancaya and Casposo/Manantiales mine complexes in Chile and Argentina, respectively. Meanwhile, Austral has equity investments in the Ensign Minerals and Rawhide Mine, which are located in Utah and Nevada, respectively.
Austral Gold had $1.5 million in cash and unsold bullion at hand and $14.1 million in net financial debt as of 30 June 2023, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Austral Gold
