Independence group secures $170M funding from NAB

THE BOURSE WHISPERER: Independence Group (ASX: IGO) has signed a new facility agreement with National Australia Bank (ASX: NAB) totalling $170 million.

The company explained the new facility agreement provides it with a number of facilities that will provide financial flexibility as development of the company’s Tropicana gold project in Western Australia moves closer to completion.

The first gold pour for Tropicana is expected in the December 2013 quarter.

Key features of the facility agreement include:

–    A $130 million revolving corporate loan facility available on an “as needs” basis with a term to 31 December 2015;

–    A $20 million asset finance facility which replaces an existing $15 million asset finance agreement with NAB; and

–    A $20 million contingent instrument facility terminating on 31 December 2015 which will free up liquidity in relation to current cash backed bonds.

“The facilities are offered on a secured basis usual for these types of facilities,” Independence Group said in its ASX announcement.

“However the security provided is not overly restrictive and the company will continue to enjoy flexibility in its day-to-day operations.

“There is no requirement for gold or currency hedging associated with any of these facilities.”

Independence Group said the bank facilities would provide support to the company’s growth strategy.

They are intended to assist the company in times of to weather economic uncertainty and commodity price fluctuations while at the same time providing the flexibility to continue mine and regional exploration including resource and reserve drill outs, and fund Tropicana expansion and enhancement studies.

The company pointed to its current balance sheet, which it described as being, “strong…with very low debt”.

The $170 million facilities will enable the company to access in excess of $145 million in cash resources by way of the $130 million corporate facility, a net additional $5 million asset financing facility and release of cash backed bonds.