Navarre Minerals signs Mt Carlton offtake and financing deals with Glencore International
Navarre Minerals will use the funds from the U$7 million finance facility for working capital to support development of the Mt Carlton mine plan and ongoing exploration.
Navarre Minerals (ASX: NML) has executed a new offtake contract and US$7 million finance facility with Glencore International AG related to the recently-acquired Mt Carlton gold-silver-copper operation in northern Queensland.
The offtake agreement covers the sale of all Mt Carlton concentrate to Glencore for the remainder of the 2023 financial year.
Details of the deal remain undisclosed; however, the terms are reported to be highly competitive, providing Navarre with additional product specification flexibility to facilitate maximum value capture from the product stream.
Delivery of concentrates under the new agreement will commence immediately.
Finance facility
The finance facility will provide additional working capital to support the development of ore sources for the mine plan and ensure exploration opportunities across tenements adjacent to the Mt Carlton operation can be fully tested.
Financial close remains subject to customary registrations and third-party consents.
The facility has a maturity date of June 2023 and Glencore has security in respect of the Mt Carlton assets.
Key agreements
Navarre managing director Ian Holland said the company was pleased to have executed key commercial agreements with Glencore.
“The offtake contract provides very competitive terms and flexibility for our concentrate sales while the associated finance facility provides additional working capital to support the development of ore sources for our mine plan and our aggressive exploration programs,” he said.
Environmental bond
The established Mt Carlton operation was acquired from Evolution Mining (ASX: EVN) earlier this year for $90 million.
It currently includes the V2 open pit, five potential satellite gold deposits and a 960,000 tonnes per annum processing plant producing gold-copper-silver concentrate and gold doré, situated within a broader tenement package of approximately 815 square kilometres.
Under the terms of the “transformational acquisition”, Evolution agreed to provide surety for an environmental bond capped at approximately $32 million until December 2023.
Evolution has since agreed to a revision of the amortisation schedule, extending it to June 2025, at which time bonding for the operation will be fully cash-backed by contributions made by Navarre.