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ElDore Mining Corporation lands financing to acquire Baita copper mine in Romania

ElDore Mining Corporation lands financing to acquire Baita copper mine in Romania

ElDore Mining Corporation (ASX: EDM) has secured a funding facility of up to A$25 million through JC Long Term Value Fund Ltd (JCLTF) enabling it to acquire the Baita Copper-Gold mine in Romania.

The Baita Copper-Gold mine is on care and maintenance and is an integrated underground and copper concentrator plant located in Transylvania, West Romania. The mine ceased operations in February 2010 due to financial and other issues related to the previous owner.

The finance and debt facilities will enable ElDore to move to a copper-gold producer with the completion of the acquisition.

The majority of funds will be used to complete the purchase and Eldore believes it re-start operations at the mine within 90 days of settlement and quickly rebuild to an annualised rate of 200,000 ore tonnes per annum.

The 36 month facility will provide part of the funding requirements for the acquisition as well as working capital for ongoing exploration at the Mt Hagen JV in Papua New Guinea.

On March 17 Eldore announced it will pay a consideration of €15 million to Far East & Pacific Investments (FEPI) including the reimbursement of €200,000 in expenses to complete the acquisition.

The purchase agreement requires the assumption of up to €1.5 million in debt and a deposit of €750,000 was payable within seven days. The transaction is subject to due diligence and shareholder and regulatory approvals.

A gold rich copper concentrate will be produced from Baita and on-sold to third party smelters in India, China or Europe.

ElDore has also agreed a EUR 7.5 million debt facilitiy with a European based financial institution, for the debt segment of the funding and working capital for Baita and its exploration activities.
 
The debt is unsecured, is repayable over 24 months and has an interest rate of 10% and the facility is subject to the completion of formal documentation and agreed conditions precedent before draw-down.

Eldore plans to re-start where mining left off at this level where strong mineralisation exists and the ore body remains open in most directions.

Samples collected from broken ore stocks both underground and remaining on surface on 28th September 2009 returned an average grade of 2.67% copper and 2.06 g/t gold.

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