Mutiny Gold receives US$2 million funding

THE DRILL SERGEANT: Mutiny Gold (ASX: MYG) has completed a second loan from Canadian gold-streaming company Sandstorm Gold.

The company completed the first loan from Sandstorm in November 2012, which it converted to shares in January 2013.

The second deal will result in Mutiny Gold receiving US$2 million from Sandstorm to fund ongoing activities in the lead-up to the completion of financing for the company’s Deflector copper-gold project in Western Australia.

The loan is interest free, with a due date for repayment of 30 September 2013 unless converted into shares before that date.

In the company’s announcement to the Australian Securities Exchange, Mutiny Gold managing director John Greeve said the completion of the second loan had demonstrated Sandstorm’s continued support of the Deflector project despite a market where the gold price recently retreated to the lows of 2011.

“The company plans to apply the proceeds of the loan to progress the Deflector exploration and implementation plans,” Greeve said.

“Meanwhile, Mutiny is continuing negotiations with the banks and remains confident it will be able to raise the required debt finance to put Deflector into production.”

Mutiny Gold completed a Definitive Feasibility Study at Deflector in 2012, which determined the project to be a low cost (C1 cash cost of $618 per ounce of gold equivalent), high-grade robust project.

Mutiny announced in April that it intended expanding the scope of its 2013 Deflector drilling program to allow it to increase ounces to support a potential increase of gold production from 70,000 ounces per annum to over 105,000 ounces per annum by year three at the proposed mine.

Supported by structural interpretation studies and a Sub Audio Magnetic (SAM) survey exploration program, Mutiny will aim the proposed drilling at targeting an increase to the current Deflector deposit resource of 2.86 million tonnes at 6.4 grams per tonne gold, 6.8 grams per tonne silver and 0.9 per cent copper for 591,000 ounces gold, 629,000 ounces silver and 27,000 tonnes of copper.

The resource has, to date, been defined over 900 metre of strike length, and has been interpreted by Mutiny to be open at depth and along strike.

The company indicated its expanded 2013 drilling program will include 4,000m of diamond and reverse-circulation drilling, up from a proposed 3,000m it announced in February 2013, to target high-grade grade extensions of Deflector.

Mutiny Gold said it believes the potential exists for it to provide significant increases to the current resource base.