G Mining Ventures Sees Franco-Nevada Take 9.9% Stake As Part Of $481 Million Financing Package

G Mining Ventures (TSXV: GMIN) has evidently attracted the eyes of major producers. The firm this morning revealed that it has entered into binding commitments with Franco-Nevada (TSX: FNV), Eldorado Gold (TSX: ELD), and two separate funds for a financing package worth $481 million for its Tocantinzinho Gold Project.

The finance package is set to take the form of several different forms of financings, including:

  • $250 million via a gold stream with Franco-Nevada
  • $116 million via a financing with strategic investors, including Eldorado Gold, Franco-Nevada, and La Mancha Investments
  • $75 million via a senior secured term loan with Franco-Nevada
  • $40 million via an equipment financing with Cat Financial

The financing package on a combined basis is expected to be enough funding to enable the company to get over the finish line with putting the project into production. Total costs to get to the finish line are estimated at $476 million, including taxes, of which $455 million is remaining. Combined with $54 million in current cash on hand, the company now expects to have the funds required to put the Tocantinzinho Gold project into production.

The gold stream will see Franco-Nevada purchase 12.5% of the gold production from the mine for the first 300,000 ounces, after which the figure drops to 7.5%, with gold to be sold at 20% of the spot price of gold.

The equity financing meanwhile will see La Mancha acquire 111.9 million common shares, Franco-Nevada acquire 44.7 million common shares, and Eldorado Gold acquire 32.5 million common shares, with shares to be sold at $0.80 per each. On a post-transaction basis, once shareholder approval is granted, La Mancha will own 25.0% of the firm, while Franco-Nevada will own 9.9% and Eldorado Gold will hold 17.7%.

Production at Tocantinzinho is expected to begin in the second half of 2024.

G Mining Ventures last traded at $0.65 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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