Gascoyne Resources (ASX:GCY) enters into $20m debt facility

• Gascoyne Resources (GCY) enters into a $20 million debt facility with major shareholder Deutsche Balaton AG
• The facility consists two equally priced tranches over a two year term with key terms including a fixed interest rate of 18 per cent per annum payable six-monthly in arrears
• The company says $10 million of the facility is earmarked to repay debt while the other funds will go towards drilling programs and growth opportunities
• Gascoyne’s fully owned Dalgaranga gold project in Western Australia has reported encouraging initial results
• Shares in Gascoyne Resources

Gascoyne Resources (GCY) has entered into a $20 million debt facility with major shareholder Deutsche Balaton AG.

The facility consists of two equal tranches over a two-year term. Tranche 1 will be convertible upon Balaton’s election at 30 cents per share. Tranche 2, meanwhile, will be convertible at Gascoyne’s election at 30 cents, or at Balaton’s election at 36 cents per share.

Key terms for the facility include a fixed interest rate of 18 per cent per annum, payable in six-monthly arrears, an arrangement fee of two per cent at face value and no applying financial covenants or financial ratios.

The company says $10 million is earmarked to pay off debt while the other funds will go towards drilling programs and growth opportunities.

According to Gascoyne, its fully owned Dalgaranga gold project in Western Australia has reported encouraging initial results.

The company intends to put funding towards additional near mine drilling at the project.

Shares were down 1.7 per cent trading at 28.5 cents at 11:53 am AEDT.