Unity loans Cortona $1M to accelerate Dargues Reef

THE BOURSE WHISPERER: Cortona Resources (ASX: CRC) and Unity Mining (ASX: UML) have entered into a binding loan agreement.

The agreement will result in Unity loaning up to $1 million to Cortona to accelerate pre-development activities at the Dargues Reef gold project, aimed at delivering cost and time benefits to the development of the project.

Preliminary work has identified a range of tasks that may deliver positive outcomes to the development of the Dargues Reef gold project,” Cortona Resources said in its ASX announcement.

“Whilst Cortona and Unity will ultimately need to agree on the specific tasks, and the amount of funding allocated to such tasks, prior to Cortona drawing down on the Loan.”

Such tasks are likely to include:

–    Detailed engineering studies to evaluate whether elements of Unity’s Kangaroo Flat processing facility can be utilised, dismantled and transported to Dargues Reef in order to deliver cost and time savings;

–    A detailed survey of the proposed plant and infrastructure layout at Dargues Reef in preparation for the commencement of site works;

–    Mobilisation of earthmoving plant to Dargues Reef in preparation for earthworks, which is expected to require one month’s notice;

–    Relocating one or more of the Kangaroo Flat office buildings to Dargues Reef in preparation for the commencement of site works; and

–    Such other matters as may be agreed with Unity.

Cortona said the loan agreement reflects a bi-partisan view that prompt gold production at Dargues Reef is an important step towards creating a gold producing company.

The key terms of the Loan include:

–    Loan Amount: Up to $1 million, in staged drawdowns for uses pre-approved by Cortona and Unity;

–    Interest Rate: 10% p.a. payable quarterly in arrears;

–    Maturity Date: 12 months from the first drawdown date, with no penalty for early repayment;

–    Security: Any amounts drawn down under the loan are unsecured, unless the Scheme Implementation Agreement is terminated in which case the loan is to become secured by a first-ranking security over Cortona’s freehold land in New South Wales, Australia.