Marengo Mining and its wholly-owned subsidiaries, Marengo Mining (PNG) Ltd and Yandera Mining Company Ltd have signed a loan agreement with major shareholder, Sentient Executive GP IV, Ltd for the general partner of Sentient Global Resources Fund IV, LP.
Under the terms of the agreement, Sentient will provide Marengo with a loan facility of US$3 million. The loan accrues interests monthly at a rate of 9% per annum, payable quarterly. The maturity date of the loan is December 31, 2014.
Subject to applicable shareholder and regulatory approvals, the principal and interest accrued on the loan may be payable by the company through the issuance of common shares or other securities convertible into common shares of Marengo.
The company expects to use the funds obtained from the loan to fund its working capital requirements and for general corporate purposes.