Gowest Gold Ltd. has secured a $10-million loan agreement to fund additional exploration at its North Timmins Gold Project, the company announced on Wednesday.
The loan agreement is with Greenwater Investment Hong Kong Limited.
In addition, the company reported it has completed a 5,000-metre surface diamond drill program.
The new exploration will focus on Gowest Gold’s 100 per cent owned Bradshaw Gold Mine. This newly funded program is part of a larger planned program aimed at expanding the mineable resource at Bradshaw, as well as to further test other parts of the company’s North Timmins Gold Project area where notable gold has also previously been intercepted.
“This significant loan from one of our major shareholders clearly demonstrates their faith in our team’s ability to expand our current mineable resources and reserves at the deposit,” said Dan Gagnon, president and chief executive officer of Gowest Gold Ltd.
“As we continue to prepare to return to mining at Bradshaw, we are progressing our exploration work both at Bradshaw and to further test other parts of the North Timmins Gold Project, where we have already intercepted gold mineralization.
“Our entire team is looking forward to a very exciting upcoming year for us and our shareholders.”
The loan will be funded in tranches on a monthly basis from the date of the loan agreement until October 2024, in accordance with a funding schedule set out in the document.
Each tranche is conditional on Gowest Gold achieving certain milestones set out in an exploration plan and budget agreed to with the lender.
The loan is unsecured, and funds advanced under the loan agreement will bear interest at a rate of 12 per cent per annum. The outstanding principal balance, together with accrued and unpaid interest thereon, will be due and payable on Dec. 31, 2025.
The outstanding principal balance and accrued interest may be prepaid by the company at any time during the term of the loan without penalty.
Plans for the new $10 million exploration program on the North Timmins Gold Project include evenly splitting the funds between underground drilling and surface exploration.
The surface drilling program, budgeted at $5 million, mainly entails diamond drilling. A total of 16,500 metres is planned for the central to western portion and the depth extension of the Bradshaw deposit (10,000 metres), the Sheridan Zone (2,500 metres), the Roussain Zone (2,500 metres), as well as induced polarization targets (1,500 metres).
An induced polarization geophysical survey is also planned for the surface exploration program to generate new targets on the North Timmins Gold Project area.