Algold Resources entered into a secured credit agreement for a $5 million short-term loan facility with a consortium of lenders, including BPM Capital, Downtown Special Situations, Delaware Street Capital Master Fund, Saiso Partners and Capital Drilling.

As security for the loan, Algold granted the lenders a hypothec on all the former’s assets, including the equity interests that it holds in each of its direct subsidiaries. The loan has a term of one year and will bear interest at an annual rate of 15%. Algold also issued the lenders a total of 12,756,470 common shares, which are subject to a four-month hold period. The loan remains subject to the approval of the TSX Venture Exchange.

Algold concurrently entered into a $9.2 million low-dilution funding agreements. Algold and one of its major shareholders, Wafa Mining & Petroleum, signed a non-binding term sheet for an investment by Wafa, under which Wafa will acquire a 10% interest in the company’s Tirex subsidiary, owner of the Tijirit mining permit and gold development project, as well as a subscription for 8,837,472 common shares.

“This strategic funding confirms [Wafa’s] commitment to help Algold reach the next stage of development,” said Algold CEO Benoit La Salle. “We are delighted to have received such a substantial commitment from our lenders as well as from one of our largest shareholders, who understand the full potential of the Tijirit Project.”

The net proceeds of the loan, the investment and the subscription will be used to fund completion of technical studies, for working capital and for general corporate purposes.

Algold Resources concentrates on the exploration and development of gold deposits in West Africa.