Telson Secures US$25 million for Tahuehueto Mine

The good relationship between Telson Mining and Accendo bank continues, as the Canadian mining company secures a US$25 million loan to complete the construction of their gold mine, located in Tahuehueto, reported Telson in a press release.

Last year, Telson’s Mining CEO Ralph Shearing in a conversation with MBN, talked about their project in Durango. The project had a 70 percent construction development and the final assembly of the plant was still pending. The crusher installation needed completion, as well as the conveyor feed circuit to the ball mill, the power plant and the water supply. Shearing said the project was expected to yield between US$20 million and US$30 million in its first year of operation. The production of the mine would then propel Telson into a very profitable junior mining company. Shearing concluded by saying Telson will become a significant mid-tier mining company.

Back in June, the first agreement between Telson and Accendo had a US$12 million loan destined to the facility construction with a repayment three-year term plan,  and an interest rate of 13.5 percent per year. Accendo also agreed to purchase Telson’s existing US$500,000 debt with the Tahuehueto mining project’s suppliers and they have also agreed on converting the debt into a common share, as reported by last year’s press release.

Today, with the site construction almost concluded, the capital expenditure investment required to complete the mine construction and commissioning of the project is estimated at US$15.4 million. This includes the US$12.6 million for equipment and construction with a 15 percent contingency, in addition to US$2.8 million to support the operations until the mine starts generating  a positive cash flow.

Accendo is investing in debt, a silver stream and equity. US$5 million will be delivered by Telson as part of a silver stream agreement for the first 1.25 million ounces of production. After the first 1.25 million ounces are delivered, the silver stream percentage will drop to 20 percent of the payable silver production. All streaming obligations from Telson will fully terminate after 10 years. And the final US$8 million will be a private placement between Endeavour Financial and Affiliates, Accendo Banco and other third parties, as told by the press release.

In a statement, Ralph Shearing stated that after many months of hard work and negotiations, he is delighted to announce that the funding package will allow Telson to immediately reinitiate construction at the Tahuetueto mine site. They are targeting pre-production to commence within 10 to 12 months and full-scale production in 12 to 14 months.