Allied Gold will receive a US$35million loan from the International Finance Corporation (IFC), a member of the World Bank Group, to underpin the Aus$150 million redevelopment of the Gold Ridge mine in the Solomon Islands.
The 5 year loan facility provides additional financial flexibility allowing Allied Gold to conserve cash it would have otherwise applied to the project redevelopment or consider increasing regional exploration activities. The facility allows for principal repayments no earlier than 2012.
Key benefits in securing the loan are the collaborative support the IFC can bring to the Solomon Islands project and that the company will not be required to enter into gold hedging and can retain its hedge-free status.
Refurbishment and redevelopment activities at Gold Ridge are ongoing with key items ordered and commissioning activities expected to begin in the March quarter of 2011.
Allied Gold has engaged GRES in an Aus$64 million lump sum Engineering Procurement & Construction (EPC) contract for refurbishment of the Gold Ridge plant.
Allied Gold acquired the Gold Ridge project in late 2009 through the acquisition of Australian Solomon Gold.
Pre-development works are under way with annual production of 120,000 ounces expected in 2011. The current mine plan is for 943,000 ounces to be recovered over a 7.8 year mine life.