Gascoyne in $60m facility for gold project

Gascoyne Resources has mandated two of Australia's largest banks to arrange a $60 million debt facility for the development of its Dalgaranga gold project in the Murchison region.

Perth-based Gascoyne said the facility had been arranged between Commonwealth Bank of Australia and National Australia Bank on a 50:50 basis.

The facility agreement follows news in July that Gascoyne had awarded a $66.5 million contract to GR Engineering Services for the construction of processing facilities at Dalgaranga.

The project is expected to produce around 100,000 ounces of gold a year, with the mine holding an initial six-year life.

First production is slated for the June quarter next year.

“Mandating tier one Australian lenders CBA and NAB for the debt funding required for the development of the Dalgaranga project is a strong vote of confidence in the project and the work undertaken by the Gascoyne team since we finished the feasibility study in November last year,” managing director Michael Dunbar said.

“The terms we have negotiated highlight the quality of the project.

“With the mandate completed, construction will continue on schedule towards production in Q2 of next year.”

Gascoyne shares slipped 2 per cent to 51.5 cents each ahead of the close of trade.