TSXV-listed Galane Gold has entered into a loan agreement with Barak Fund SPC for a US$5 million secured loan facility which will be used to refurbish and expand the processing facilities and restart underground mining operations at the Galaxy gold mine in Barberton, South Africa.
Drawdowns on the facility remain subject to various conditions precedent, which the company expects to complete by July 2018.
“We are very pleased to enter into this agreement with Barak Fund, an organisation with intimate knowledge of both the mining sector and operating in South Africa,” says Galane Gold CEO Nick Brodie.
“We anticipate our first production at Galaxy in the first quarter of 2019 and annual production at Galaxy to be over 25 000 oz of gold at a cash cost per ounce of less than $800. We then plan to complete a study on a second expansion phase with the objective of doubling the capacity at the Galaxy processing plant to 60 000 tpm and decreasing the cash cost per ounce as a result of increased economies of scale.”
Galaxy has been associated with mining activity dating back to the late 1800s, has historic production of over 1.2 Moz of gold, and a current measured and indicated mineral resource and inferred mineral resource of over 1.4 Moz of gold.
As a result, Galane Gold expects Galaxy to provide a strong base for the company. The recommencement of operations is a major step forward in its corporate goal to reshape the company into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles.
For more information about Galane Gold, read the February 2018 edition of Mining Review Africa magazine.