Centerra approves further funding for European JV partner on 2017 success; gets more credit

VANCOUVER (miningweekly.com) – Canadian miner Centerra Gold has approved expenditures of $1.85-million for this year to fund exploration campaigns in Sweden by its joint venture partner (JV) Erris Resources, following encouraging 2017 results.

Results of the drill programmes undertaken in the second half of 2017 at the Klippen and Käringberget projects, in Sweden, have confirmed large alteration systems, indicating the prospective nature of the licences.

Recent magnetic surveys have resulted in the team identifying new drill targets at Klippen and Käringberget, prompting Centerra to put up the $1.85-million for the 2018 work programme, aimed at moving the Klippen, Käringberget and Brännberg gold projects further along the value curve and for general exploration on new targets.

The funding is part of the Centerra JV agreement, entered into in 2015, to explore a portfolio of gold properties within a common area of interest in northern Sweden covering about 65 796 km².

The 2018 work programme will include ground magnetic, electromagnetic and induced polarisation surveys, surface sampling, mapping, ground-truthing and drilling.

Erris, whose equity is listed on the LSE Aim-market, has awarded a contract for drilling to Northdrill Oy for 2 750 m of drilling at the Klippen gold project.

"We have a highly active work programme across our portfolio, including the Abbeytown zinc project in Ireland. Exploration is integral to growth in the mining industry, something recognised by Centerra Gold and highlighted by its ongoing investment in our projects in Sweden," CEO Merlin Marr-Johnson said in a statement.

In January, Centerra nominated the company's Brännberg gold project as an elected designated project area under its existing agreement, giving it a right to earn 51% by funding $1-million in exploration expenditures over two years.

Erris also has the strong backing of Osisko Gold Royalties, which holds 19.9% of the company and a 1% net smelter royalty over the explorer's advanced Irish zinc prospects.

NEW REVOLVING CREDIT FACILITY
Centerra also reported this week that it has entered into a $500-million four-year senior secured revolving credit facility with a syndicate of eight financial institutions.

The credit facility replaces the $315-million Centerra BC Holdings credit facilities, for the wholly-owned subsidiary through which Centerra holds the Mount Milligan mine, in British Columbia, which had an outstanding balance of $190-million, and the nonrevolving $125-million credit facility entered into in early January in connection with the acquisition of AuRico Metals.

Centerra advised that the new credit facility is for general corporate purposes, including working capital, investments, acquisitions and capital expenditures.

"While Centerra has a strong balance sheet and we generate significant operating cash flow, we feel it is important to have the added financial flexibility which a corporate revolving credit facility gives us," said president and CEO Scott Perry.

The company also reports that on January 29, it repaid the outstanding balance of $76-million under its $150-million corporate revolving credit facility with the European Bank for Reconstruction and Development.