Nativo secures Phase 1 La Patona gold plant financing from Chancery Royalty
London-listed Nativo Resources has secured a binding letter of intent with Chancery Royalty for project finance and an equity subscription to complete the construction and commissioning of the Phase 1 La Patona gold ore processing plant, in Peru.
The plant is located 45 km from Nativo's Tesoro gold concession.
Nativo advises that project finance of $3.5-million will be drawn in seven monthly installments, with the first installment due by December 31.
The finance will be applied to completing construction, commissioning and associated infrastructure at La Patona Phase 1.
The equity subscription, in turn, involves £600 000 through the issue of 285-million new ordinary shares in two tranches. Chancery will ultimately hold 8.7% of Nativo's enlarged issued share capital.
In consideration for the project finance, Nativo will grant Chancery a 6% gross revenue share on gold produced at La Patona until an aggregate commercial return equivalent to 3 034 troy ounces of gold has been received. Thereafter, a 1.5% gross revenue share for the remaining life of La Patona will be due.
The company's Phase 1, 70 t/d leaching/cyanidation gold processing plant is substantially developed, with several million dollars of capital already having been invested at the site. The Chancery agreement provides the funding required to complete construction and bring the plant into production.
The plant is expected to take about five to six months to complete construction, with commissioning expected in the second half of 2027.
"La Patona is a central part of our strategy to build a vertically integrated gold mining and processing business, allowing us to process both material from our own operations and third-party ore. Developing our own processing capacity is expected to reduce our reliance on toll processing and enable Nativo to retain more of the value generated from its gold production.
"Importantly, by building on the substantial prior investment already made in La Patona, the Chancery agreement provides an efficient and capital-effective pathway to first production. Critically, the cashflow generated by Phase 1 is expected to fund the subsequent Phase 1a and Phase 2 expansions through to 350 t/d," says Nativo CEO Stephen Birrell.
