Troy gets finance for Karouni

UPDATE 2.40pm: Troy Resources says it has refinanced its debt through a new $100 million facility with Investec Bank that will allow it to bring its Karouni gold project in Guyana into production.

The company said it believed the $30 million the new facility offered in new immediate debt capacity, along with existing cash reserves of $54.1 million and operating cashflow would be sufficient to bring its Karouni mine into production.

Troy managing director Paul Benson said the new facility would also give the company the flexibility to consider other opportunities.

"Equally importantly from my perspective, the facility also enables us to utilise operating cashflows to recommence brownfields exploration at both Karouni and Casposo where we believe we have excellent potential to add to the resource inventory," he said.

The funding agreement comes with hedging obligations. Troy will also be obliged to grant 3.3 million, three-year call options over its ordinary shares to Investec to the value of $5 million with an exercise price of $1.50.

Troy said the facility would have a three-year term with semi-annual repayments beginning in June next year.

The Karouni project in Guyana hosts a known resource of 16.7 million tonnes at 3.1 grams per tonne gold for 1.65 million ounces.

Troy picked up the Karouni asset when it took over Azimuth Resources in a friendly scrip bid launched in March last year.

The company already operates the Andorinhas gold project in Brazil and the Casposo gold project in Argentina, which produces more than 100,000 ounces a year.

Troy shares closed up four cents, or 4.28 per cent, at 97.5 cents.