On Friday, Goldstone Resources (LSE:GRL) announced it had entered into a loan agreement with major shareholder, Paracale Gold. The loan of $1.224m will accrue interest of 6.0% per annum and is to be repaid in full by 2nd June 2022. Goldstone will draw down $324k immediately with three further tranches of $300k available over the next nine months.

Paracale Gold’s existing 40,352,377 warrants will be cancelled and replaced with the same number , exercisable at 1.2p at any time time until 2nd June 2022.

The loan will provide Goldstone with funds to continue advancing its Akrokeri-Homase project in the Ashanti region of south-western Ghana. The project lies 8 km along strike from the Obuasi Gold Mine, one of the world’s major gold mines with a total historical and current resource in excess of 70M ounces.

Two previously producing assets in the world class Ashanti Belt are included in the project; the high-grade Akrokeri underground mine and Homase open-pit mine. Goldstone is aiming to deliver gold production from both mines by mid-2020.

The Akrokeri mine previously produced 75,000 ounces of gold at a recovered average grade of approximately 24g/t Au, while historical recovery from the Homase open-pit mine totals 52,000 oz Au at an average grade of 2.5g/t. 

Goldstone reported in December that shallow workings are currently being mapped as they are made safe at the Akrokeri mine while a pilot heap leach project is underway at the Homase open-pit mine.

Emma Priestley, CEO of GoldStone, commented:

"Paracale Gold shares the Company's vision for the development of the Akrokeri-Homase Project in Ghana.  In what remains a challenging market for the natural resource sector, we are pleased to have secured the necessary funding to continue the advancement of AKHM and we welcome and value the continued support of our major shareholder, Paracale Gold as we seek to bring AKHM into production by mid 2020."

Author: Stuart Langelaan

Disclosure: The author does not own shares in the company mentioned above