Mayfair Gold (TSXV: MFG) has signed an engagement letter and non-binding term sheet with Macquarie Bank for a proposed C$300 million project finance facility to build its Fenn-Gib gold project in Northern Ontario.
Alongside the debt, Macquarie has agreed to buy C$10 million of Mayfair shares at C$4.26 apiece, a 10% premium to the stock’s 5-day volume-weighted average price. Together, the two pieces form a financing package of up to C$310 million.
The facility would carry interest at the adjusted term Canadian overnight repo rate average plus 4.75%, dropping to CORRA plus 4.25% once the project is complete. Up to C$20 million of interest can be capitalized during construction, and that amount sits within the C$300 million headline figure.
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A C$25 million early tranche is expected to be available at closing to cover early works, long-lead equipment and detailed engineering. Quarterly repayments would begin six months after commercial production starts, with the loan fully repaid within 72 months of the initial drawdown that follows the early tranche.
Macquarie also secures an offtake right on the first 50,000 ounces of gold produced each year, capped at 300,000 ounces and priced at a published reference price less US$50 per ounce. Half of that right vests now, with the balance vesting when the facility closes.
The bank would act as mandated lead arranger, agent and sole underwriter, and may bring in other lenders for at least 30% of the facility.
“The proposed financing provides a strong foundation for our broader project funding strategy while allowing us to maintain a disciplined approach to capital allocation and project execution,” said chief financial officer Kevin Annett.
The facility however does not cover the full bill. Fenn-Gib’s 2026 prefeasibility study pegs initial development capital at C$450 million, and the Macquarie loan would fund the majority of that if completed as contemplated. The term sheet remains subject to due diligence, an independent engineer’s review and definitive documentation.
That initial capital estimate is based on a proposed operation that would produce 64,100 ounces of gold on average over a 14.3 year mine life at all in sustaining costs of $1,292 an ounce.
Mayfair Gold last traded at $3.82 on the TSX.
