Hambledon Mining secures EBRD investment to develop Sekisovskoye gold mine

Feb 22. Proactive Investors UK

Hambledon Mining secures EBRD investment to develop Sekisovskoye gold mineHambledon Mining (LON:HMB) has reached a funding agreement with the European Bank for Reconstruction and Development (EBRD), which could provide it with over US$20 million to invest in its flagship project.

This morning, the company announced that EBRD has agreed terms of a US$15 million loan facility and a US$3 million equity investment at a price of 3.25 pence per share. In addition, Hambledon has issued warrants over 30 million shares worth US$2.3 million.

This agreement follows the approval by the EBRD board of directors earlier this month.

All of these funds will be invested in the development of the Sekisovskoye underground gold mining operation in Kazakhstan.

Under the terms of the deal, US$15 million will be lent in two tranches, which will be repayable in quarterly instalments between January 2015 and October 2017. The loan ceases to be available for draw down in February 2014.

The company expects to satisfy all of the conditions of the loan agreement within four weeks, enabling it to receive the first tranche of US$10 million.

The availability of the second tranche is subject to certain production targets being met.

Hambledon also said that its director Jeff O’Leary will step down from the board to make room for a director nominated by EBRD.

Hambledon aims progressively to ramp up gold production at Sekisovskoye to 100,000 ounces per year. Only yesterday, Hambledon reported high grade drill results from the project with one hole returning more than 10 grammes per tonne gold.

The results are consistent and in many areas exceed the geological and mineral resource modelling previously carried out at the property, the company said.

Hambledon Mining Plc is a gold mining company producing approximately 26,000 ox gold annually at the Sekisovskoye open pit mine in East Kazakhstan. At the same time it is developing the high grade underground deposit at “Seki”  from where the majority of the 2.0m oz JORC resource derives. Underground mining will commence at the end of 2011 and will ramp up to 100,000 oz by 2016. The open pit mine has sufficient resources until 2014. The company is debt free and recently completed a ?9m fund raising primarily designed to drive down costs.

A 25,000m drilling campaign is currently under way to validate and improve the resource category.

Further enhancements to the asset base can be made in Kazakhstan through acquisition.

http://www.proactiveinvestors.co.uk/companies/news/39280/hambledon-mining-secures-ebrd-investment-to-develop-sekisovskoye-gold-mine-39280.html

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