Bass Metals (ASX: BSM) has accepted a credit approved offer to extend its debt facilities by up to $7 million to fund exploration and feasibility projects at its Hellyer Mine Project (HMP), if required.
The funds will also be used for additional working capital for the HMP, located in north west Tasmania.
Following the completion of commissioning and ramp-up activities at the HMP at the end of March, 2011 and a technical review by RMB Resources Ltd, Bass accepted the extension.
The new facilities provided by RMB Resources, an experienced mining finance house, increase the company's financial capacity to support unexpected technical issues in the HMP which might arise and the flexibility to increase the level of exploration and feasibility study activity.
The structure of the extended facilities comprises a $5 million working capital facility and a $2 million extension to the existing $12 million project loan facility.
In a statement the company said "the facilities have been offered on terms and conditions which include ongoing technical review, fees and interest charges on similar terms to the original project facility and the issue of up to 7 million options over Bass shares subject to the level of drawings but do not include any requirement for additional hedging."
The company plans to repay the facilities from HMP cash flows, with the extended project facility sheduled to be repaid by 31 March 2012 and the working capital facility by 31 December, 2012.
Bass Metals has recently completed its second milling campaign.
Mike Rosenstreich, managing director, said “the March quarter was all about commissioning and ramp-up, and given the operational results to date, the June quarter is poised to complete that ramp-up process and be largely a full-scale production quarter."
On March 16 Bass Metals received further encouraging drill results at its high-grade polymetallic volcanogenic massive sulphide (VMS) deposits within the HMP.
Progress is being made at three copper-lead-zinc-silver-gold prospects and a new high-grade drilling intercept has confirmed the potential at the Switchback target.