Angus & Ross (AGU-L) has lined up a US$30-million loan facility combined with an issue of equity to allow faster development of the Black Angel zinc-lead mine in western Greenland.
Cyrus Capital Partners, a hedge fund based in New York, will provide the loan and will receive 37.5 million warrants it can exercise at 0.20, which would provide Angus & Ross with another US$15 million and give Cyrus Capital about a 20% stake in the company.
Angus & Ross has called a shareholder’s meeting to approve the arrangement for early July.
Restarting production at Black Angel would cost about US$39 million, according to current feasibility estimates. A pre-feasibility study in late 2005 put the remnant reserve at the former producing mine at 2.2 million tonnes grading 9.7% zinc and 3% lead, with small additional resources on two other zones, Glacier and Ark.
Under the current plans to resume production, Black Angel would get a preconcentration plant, rather than a full flotation system, and ship upgraded ore to another mill.
In 2007, the company plans to install a cable car system at the site and refurbish equipment still in the mine, along with finishing metallurgical testing, pre-concentration plant design, and a final feasibility study. In 2008, it hopes to build the pre-concentration plant, put in an ore conveyor, and begin mining.
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