Cerrado Gold Inc. (TSXV: CERT | OTCQX: CRDOF) has announced that its wholly owned subsidiary, Mineral Don Nicolas SA (“MDN”), has issued a series of unsecured promissory notes in the aggregate principal amount of US$4M.
The notes are in addition to US$4M in promissory notes previously issued by MDN, for aggregate US$8M to date. The lenders under the notes are arm’s length parties to the company and MDN. The company expects MDN to issue an aggregate of US$10-12M in promissory notes (inclusive of the US$8M to date).
The company intends to use the net proceeds of the notes to fund ongoing development at the Calandrias Heap Leach Project in Argentina and for working capital purposes. The notes are also repayable in Argentinian pesos at the official rate and have maturity dates and interest rates.
At any time prior to maturity, MDN can elect to repay all or any portion or the notes without incurring any early repayment penalty. The company has provided a limited recourse guarantee to the lenders in respect of the Notes.
The previously issued US$4M in promissory notes, bearing 5% interest per annum and maturing in equal amounts on 18 January and 25 January 2023, are anticipated to be cancelled and reissued to the same lender providing conditions are met.
The company intends to service and repay any amounts drawn under all of the promissory notes by way of cash flows generated from its business operations or further financing activities. Mark Brennan, CEO and co-chairman commented “The proceeds received from the issuance of promissory notes by MDN allows our Argentinian team to continue to fast-track the development of the Calandrias Heap Leach project, which is expected to pour gold in April 2023.”
To find out more, please visit www.cerradogold.com
