🕐28.11.12 - 00:00 Uhr

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Dear Subscriber, Reed Resources Ltd is pleased to advise that it has finalised the documentation for a A$19 million syndicated finance facility with Credit Suisse, enabling the facility to be drawn down immediately.

The funds will be used to meet working capital requirements for Reed’s 100%-owned Meekatharra Gold Project (MGP) located in the Murchison region of Western Australia, where commissioning is on schedule to start next month. The key features of the facility are summarised as follows: * A$19 million Senior Secured Term Loan Facility. * Repayment in twelve months from first utilisation, with an option for Reed to extend by a further six months. * A hedging facility which includes 70,000 ounces in forward delivery contracts and 40,000 ounces in bought puts. Reed Managing Director Luke Tonkin said the refurbishment of the Bluebird mill at the MGP is nearing completion with the successful commissioning of the new primary crusher in November. “Installation of the new diesel-fired power station has commenced and is expected to be completed by early December whilst electrical terminations between the processing facility and the new power station remain on schedule for completion by mid-December,” Tonkin said. “Given associated industry cost pressures it has been pleasing to deliver the MGP’s capital works program within budget.

Dry commissioning of the plant will commence in mid-December with wet commissioning shortly thereafter.

Circuit gold inventory will be established during commissioning whilst plant throughput is scheduled to increase throughout the fiscal third quarter as ore generated from the Bluebird open pit is mined.” Tonkin said the start of commissioning will mark another major milestone for Reed and transition Reed from an emerging gold producer to a disciplined gold producer. Commenting on Reed’s strategy to manage gold price risk, Tonkin said: “While gold hedging is required under the facility, the combination of puts and forwards establishes a gold price floor which protects the MGP’s revenue base, effectively mitigating risk should the gold price deteriorate, whilst retaining some exposure to gold price upside.” Gold Price Risk Management Reed has selected a Participating Forward Gold Hedging Structure to manage gold price risk, which involves selling 70,000 ounces of production as forward delivery contracts and purchasing put options over 40,000 ounces, with put-only protection in the first four months before forward deliveries commence in month five. Under this agreed hedging structure, Reed will mitigate its risk should an unexpected gold price downturn occur whilst retain some upside participation should the gold price increase.

Reed will achieve a gold floor price of approximately A$1641/oz over 110,000 hedged ounces. regards The Reed Resources Team ============================================== Unsubscribe from this list: http://reedresources.us2.list-manage2.com/unsubscribe?u=773668750eed9c3d1dd94593d&id=260499d2c3&e=3a8b0a6829&c=292b53baad



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