VANCOUVER, Jan. 6, 2014 /CNW/ - Golden Queen Mining Co. Ltd. (TSX:GQM)
(OTCQX:GQMNF) (the "Company") is pleased to announce that it has
entered into an agreement to secure a US$10,000,000 loan (the "Loan").
The proceeds of the Loan will be applied to the ongoing development of
the Soledad Mountain Project (the "Project").
The Loan will allow the Company to commit to long lead-time items
required for the crushing-screening plant and commence its Phase 2
construction program. This will permit the Project to stay on schedule
with a target for the start of commissioning of the Merrill-Crowe plant
during the second quarter of 2015.
The Loan will be provided by members of the Clay family including $7.5m
to be provided by an investment vehicle managed by Thomas M. Clay, a
Director and insider of the Company. The Loan has a twelve-month term
and bears an annual interest rate of 5%, payable on the maturity date.
If the Loan is repaid on a date that is less than 183 days before the
maturity date, the Company will pay the Lenders an amount of 105% of
the principal amount plus interest on the principal amount at the rate
of 5% per annum accrued to the date the Loan is repaid.
No finder's fee or commission will be paid in connection with the Loan.
Closing of the Loan is subject to the approval of the Toronto Stock
Phase 2 Construction:
The Phase 2 construction is scheduled to begin in January 2014, and will
run concurrently with Phase 1 construction, which is expected to be
completed in February. The Phase 2 construction includes construction
of the workshop-warehouse, a wash slab for washing earthmoving
equipment and the assay laboratory. These facilities will be required
to support pre-production mining. The Company is also planning to
complete site preparation of the area where the crushing-screening
plant and the Merrill-Crowe plant will be constructed with scheduled
completion in the first quarter of 2014.
Work is continuing with detailed engineering for the facilities for the
The estimated cost of Phase 2 construction is between $5 and $6 million.
Phase 2 construction will take from three to six months and will
overlap with the Phase 3 construction program, which is expected to
start during the second quarter of 2014.
The Company expects to build up the management team on site during the
first quarter of 2014. This will include a Plant Operations Manager,
Purchasing Manager, Human Resources Manager and support staff.
Project Financing Update:
The Company is continuing to evaluate various financing options for the
Project, including equity, debt, and other alternatives. The Company
aims to secure the remaining funds required to complete the
construction of the Project in the first quarter of 2014. The
Company estimates that construction can be completed in 15 to 18
months once project financing has been secured.
About Golden Queen Mining Co. Ltd:
The Company is developing a gold-silver, open pit, heap leach operation
on its fully-permitted Soledad Mountain property, located just outside
the town of Mojave in Kern County in southern California. The Soledad
Mountain Project will use conventional open pit mining methods and the
cyanide heap leach and Merrill-Crowe processes to recover gold and
silver from crushed, agglomerated ore.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS
Cautionary Note and Forward Looking Statements
The information in this press release includes certain "forward-looking
statements". All statements, other than statements of historical fact,
included herein including, without limitation, plans for and intentions
with respect to the Company's properties, statements regarding
intentions with respect to obligations due for various projects,
statements regarding expected regulatory action or positions,
permitting, commencement of mining and similar information are
forward-looking statements. There can be no assurance that such
statements will prove to be accurate, and actual results and future
events could differ materially from those anticipated in such
statements. Important factors that could influence placing the project
into production include uncertainties involving the availability and
timing of project financing in the debt and capital markets, and there
is no guarantee that such financing will be available on terms
acceptable to the Company or at all; uncertainties involved in the
interpretation of the estimation of reserves and resources; risks of
construction and mining projects such as accidents, equipment
breakdowns, non-compliance with environmental and permit requirements,
unanticipated variation in ore grades or recovery rates; unexpected
cost increases; fluctuations in metal prices and currency exchange
rates, changes in mining laws, additional regulatory requirements in
connection with mining permits, and other risks and uncertainties
disclosed in Golden Queen's Annual Report on Form 10-K for the year
ended December 31, 2011, filed with U.S. and Canadian securities
regulatory authorities and in other reports and documents filed with
applicable securities regulatory authorities from time to time. These
forward looking statements reflect the beliefs, opinions and
projections on the date the statements are made. Forward looking
statements are based on numerous assumptions and are subject to all of
the risks and uncertainties inherent in Golden Queen's business,
including risks inherent in mineral exploration and development.
Investors are cautioned that forward-looking statements are not
guarantees of future performance and, accordingly, should not to put
undue reliance on forward-looking statements.
SOURCE: Golden Queen Mining Co. Ltd.
For further information:
Lutz Klingmann, President
Telephone: (604) 921-7570