Atlantic Gold signed a syndicated project facility agreement (PLF) with Macquarie Bank and Caterpillar Financial Services in respect of its previously announced $115 million ($89.33 million) project loan facility to fund the majority of the construction costs of the company’s Moose River Consolidated Project in Nova Scotia.

The terms of the PLF are substantially the same as previously disclosed in the news release dated February 22, 2016. That is, the PLF carries an interest rate of the Canadian dealer offered rate, or CDOR, plus a margin 5%, reducing to 4.5% post-completion, and is repayable in quarterly installments over three years.

To mitigate gold price risk and as a condition of the PLF, Atlantic is required to enter into margin-free gold forward sales contracts of 215,000 ounces, representing approximately 30% of total recovered life of mine gold production of the MRC Project at an agreed minimum forward price of C$1,500 ($1,165.16). As noted in the company’s news release dated May 2, 2016, the company has already executed gold price hedging contracts covering 100,000 ounces of production.

Drawdown under the credit agreement is subject to the satisfaction of certain customary conditions precedent. The PLF will be secured through guarantees and a first ranking charge on all assets of the company and each of its material subsidiaries.

Steven Dean, chairman and CEO commented, “Atlantic is pleased to have completed a definitive credit agreement with Macquarie Bank and Cat Financial for a project loan facility that will fund the majority of the construction costs at MRC. The company looks forward to completing its remaining financing transactions in the immediate future.”