During the first fourteen months of production, repayments of US$8,624,569 were made from the delivery of 5,222 ounces of gold thereby satisfying the requirement to repay a minimum of US$3.6 million cash during the first and second 12 months and partially meeting the requirements for the third 12 months.
The Gold Loan is accounted for as a financial liability carried at amortised cost. In determining the carrying value of the loan the cash flows due under the agreement are forecast at each quarter end based on management's best estimates of the time of delivery of payable gold, the total amount of gold expected to be produced over the mine life and the timing of that production.
Interest of $818,000 was credited to the income statement during Q2/13 and $581,000 (31/01/12: $1,595,000) was charged to mineral properties in Q1/13.
The Gold Loan is secured by a fixed and floating charge over the assets of the Group.
On 29 September 2011 the Group agreed a credit facility of up to $10 million with Sprott Resource Lending Partnership ("Sprott") for use as additional funding for the development of the Ming Mine. Subsequent to amending the agreement in December 2011 the facility is available in three instalments; the first instalment of $5 million was drawn on 29 January 2012, the second instalment of $2.5 million was drawn on 30 January 2012 and the final instalment for the balance up to $10 million was available until 31 August 2012 but was not drawn. Interest accrues at a fixed rate of 9.25% per annum. On 26 March this agreement was amended such that the principle is repayable by 31 March 2014 and is secured by a fixed and floating charge over the assets of the Group. In connection with the credit facility, a structuring fee of $100,000 and a 3% commitment fee of $300,000 were paid to Sprott in cash. Pursuant to the terms of the credit facility, the Company issued $300,000 of ordinary shares of 1p each in the capital of the Company to Sprott in exchange for the repayment of the previously paid cash commitment fee. In addition, a further 4% drawdown fee on all amounts drawn under the credit facility was satisfied by the issuance of ordinary shares by the Company.
Financing and interest charges of $391,000 were expensed during Q2/13 and $392,000 (31/01/12: $247,000) were charged to mineral properties in Q1/13.
31 January 31 July 2013 2012 $,000 $,000Reclamation and closure provisionAt 1 July 2012 1,812 1,647Released during the period - (121)Unwinding of discount 46 286 -------------------------At 31 January 2013 1,858 1,812 ------------------------- -------------------------
The reclamation and closure provision has been made in respect of costs of land restoration and rehabilitation expected to be incurred at the end of the Ming Mine's useful life. The provision has been calculated based on the present value of the expected future cash flows associated with reclamation and closure activities as required by the Government of Newfoundland and Labrador. The provision relates to restoration of all three sites associated with the Ming Mine project: mill, mine and port sites. The liability is secured by Letters of Credit for $3,267,616.