Orinoco close to finalising Cascavel funding

THE BOURSE WHISPERER: Orinoco Gold (ASX: OGX) informed the market Singapore-based private mining investment company Chancery Asset Management, has completed technical due diligence on the Cascavel gold project in Brazil (Orinoco 70%).

Chancery is the company’s funding partner for the Cascavel project.

Orinoco said the completion of the due diligence process was a key step in the completion of an overall $14 million project financing package that was announced in February.

The company explained the funding will be used to develop Cascavel, which it hopes to have in production by the end of this year.

Chancery Asset Management managing director Thomas Puppendahl declared the Orinoco’s Cascavel gold project to be, “one of the best undeveloped high-grade projects in the market”.

The due diligence was one of two conditions laid out in a binding Term Sheet the two companies signed in February for a gold sharing arrangement of US$8 million, which forms the cornerstone of Orinoco’s project funding arrangements.

The other condition being that Orinoco is to obtain all Australian statutory approvals to enable it to perform its obligations, which the company indicated it expects to finalise by the end of April.

Under the terms of the gold sharing arrangement, Chancery will participate in a share of gold production from Cascavel for a period of three years from the start of commercial production or such a time until Orinoco has delivered a minimum of 16,000 ounces of gold.

“Chancery has conducted extensive and very detailed due diligence, including several visits to the project,” Orinoco Gold managing director Mark Papendieck said in the company’s announcement to the Australian Securities Exchange.

“The completion of this process therefore represents a significant technical validation of the project and of our development and mining plan.

“The US$8 million Gold Sharing Arrangement is an innovative and flexible funding strategy for a deposit like Cascavel which, importantly, is non-dilutive to existing shareholders.

“Funds will be available by the end of April, clearing the way for us to move forward with our aggressive development plan.

“We will also soon move ahead with the final component of our equity funding package, the previously announced rights issue which will give all shareholders the opportunity to participate in this milestone capital raising at an attractive price.”

Email: info@orinocogold.com

Website: www.orinocogold.com