The company claims to have advanced the project to an estimated 60% of completion
Telson Mining has signed a letter of intent with the Accendo Syndicate to secure $25m financing to complete the construction at its Tahuehueto gold mine in Mexico.
The syndicate consists of Accendo Banco, Empress Royalty Corp & Endeavour Financial.
Telson will also utilise the funding to meet debt service obligations and for working capital purposes.
Located in north-western Durango State, Mexico, the Tahuehueto mining project is expected to see the completion of construction late 2021.
The company claims to have advanced the project to an estimated 60% of completion.
With the funding, Telson expects to complete construction of a 1,000 tonne per day processing facility and related assets to produce gold, silver, lead and zinc in concentrates within its own on-site mineral processing facility.
Telson CEO Ralph Shearing said: “This funding package now allows Telson to immediately reinitiate construction at the Tahuehueto mine site, after which we expect to rapidly advance construction targeting to commence initial pre-production within ten to 12 months and full-scale production 12 to 14 months after funding.”
To complete the Tahuehueto mine construction and commissioning, the capital expenditure investment is estimated to be $15.4m.
The investment includes $12.6m for equipment and construction including a 15% contingency. A further $2.8m of working capital is estimated to be required to support the operations until the Mine has achieved positive cash flow.
Besides, Telson, Accendo Syndicate and Trafigura Mexico have executed a memorandum of understanding (MOU).
Under the MoU, a non-binding framework is provided with terms for the parties to negotiate definitive agreements for the proposed deals that include the potential restructuring of Telson’s debt obligations to Trafigura and Nyrstar Canada.
Telson is a Canadian based mining company with two 100% owned Mexican gold, silver, and base metal mining projects.