The Ana Paula Project is located in Guerrero State, Mexico. Credit: Ramon Cliff via Shutterstock.com.

Heliostar Metals has announced a letter of intent (LOI) to secure a senior secured debt facility totalling $20m (C$27.48m), with a fixed interest rate of 10%.

This move is aimed at advancing the company’s mining operations, specifically the Ana Paula deposit in Guerrero, Mexico.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

The non-binding LOI with a syndicate of lenders, led by a New York-based financial institution, outlines the terms of the agreement.

As part of the facility, Heliostar will issue 17,239,668 share purchase warrants to the lenders.

These warrants will allow the lenders to acquire common shares of the company at predetermined prices within a 30-month period following the closing of the deal.

Each warrant grants the right to purchase one common share at $0.40 for half of the warrants and $0.55 for the other half.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The facility also includes a unique repayment structure where Heliostar is obliged to repay an amount linked to its gold sales, specifically $1,850 per ounce sold, after accounting for operating expenses.

Proceeds from this facility are earmarked for the development of the underground decline and to facilitate test mining that will process a bulk sample from the Ana Paula deposit.

Located in Guerrero State, Mexico, the Ana Paula Project is a gold resource development project.

In March last year, Heliostar acquired the project from Argonaut Gold for a consideration of $30m.

The facility’s term is set at 30 months, with the interest payable every six months.

Furthermore, the facility is expected to be secured by customary security commitments, including over the Ana Paula Project.

It also provides Heliostar with the flexibility to repay the facility early, particularly upon the sale of gold ounces.