September 29 (SeeNews) - Canada's Dundee Precious Metals (DPM) (TSX:DPM) said it has executed a $50 million (44.55 million euro) prepaid forward gold sale of a portion of its forecast 2019 and 2020 production to back the implementation of its Krumovgrad gold project in Bulgaria.
DPM sold approximately 9% of its gold production forecast for 2019 and 2020, amounting to 18,000 and 28,000 ounces, respectively, in exchange for the upfront cash pre-payment, the company said in a filing with the Toronto Stock Exchange on Wednesday.
The forward sale will take place on specified monthly delivery dates staring in May 2019 at an average forward price of $1,367 per ounce.
The transaction was undertaken with BNP Paribas, together with Canadian Imperial Bank of Commerce, Unicredit Bulbank AD and Royal Bank of Canada.
"This transaction locks in an attractive gold price on a portion of our future production and further enhances our financial strength and flexibility to advance our growth initiatives, including the construction of the low cost Krumovgrad gold mine located in southern Bulgaria," Rick Howes, DPM president and CEO said in the filing.
The company also said it received approval from its lenders on Tuesday to amend the term and amortization of an $80 million tranche, under its $275 million revolving credit facility (RCF), to align with the projected construction and commissioning schedule of the Krumovgrad gold project, the main construction permit for which was received on August 9.
"An early works program is currently underway at Krumovgrad to support commencement of construction in October, consistent with the project schedule to commence operations in the fourth quarter of 2018," Howes added.
In June, DPM said that the capital cost estimate for the construction of Krumovgrad gold project amounted to $178 million.
In Bulgaria, DPM operates Chelopech mine, located east of the capital Sofia. In Chelopech, the company produces copper concentrate containing gold and silver and pyrite concentrate containing gold.
($= 0.8914 euro)