Resumption of Gold Production Fully Financed
Breaking news: The Canadian Tucano Gold, a company not (yet) listed on the stock exchange, announces the signing of a binding letter of intent with a private equity firm for financing – which is set to bring 98 million dollars into the company’s coffers! Initially, only an investment of 49.5 million CAD was planned.
This decision, according to Tucano, follows a comprehensive five-month due diligence process, and the agreed financing will not only allow for the resumption of production at Mina Tucano but also accelerate development and exploration opportunities. Mina Tucano is an open-pit gold mine that features a modern gold processing plant with a capacity of 10,000 tons per day and substantial resources. Until 2020, it produced more than 120,000 ounces of gold annually with grades ranging from 1.2 to 1.4 g/t gold.
Financing in Two Tranches
As Tucano Gold reports, the agreed funds will be provided in two tranches, and the investment will be made under the same terms as the company’s recent private placement. This means each Tucano Gold unit will cost 0.70 CAD, with units also including half a warrant. Each whole warrant can be exercised at 1.00 CAD over a two-year period. Naturally, the financiers will acquire a majority stake in the company, but this would at least secure Tucano Gold’s near future and outline clear growth prospects.
According to Tucano, a first tranche of 49 million CAD will be due upon signing of the final agreements, while the second tranche will follow 120 days later. The company is now working to finalize the definitive agreement as quickly as possible.
Transformative Milestone
Tucano Gold’s President Charles Chebry sees the investment commitment as a “transformative milestone” for his company. With these funds, they will not only be able to resume gold production at Mina Tucano but also accelerate the utilization of additional growth opportunities. The investor is a private equity firm with significant expertise in the Brazilian mining sector. Their five-month due diligence process has now confirmed the quality of the Tucano project and the strength of the team, Chebry continued.
This private equity firm has previously supported Ero Copper in resuming operations, which led to Ero’s IPO in 2017 and contributed to that company’s success story. With the help of the new investor, Chebry added, they now aim to build Tucano Gold into one of Brazil’s leading gold producers.
