Shares in Mutiny Gold have enjoyed a solid lift on the ASX today, after the company announced an $11 million profit on a strategic gold transaction.
Mutiny said it had taken advantage of recent weakness in gold prices to purchase 50,000 ounces of gold at an average price of $1,491 per ounce.
The acquisition will enable Mutiny to deliver the gold into its 50,000 ounce hedge put in place in December 2011, resulting in an $11 million gain.
At close of trade today, Mutiny shares had gained 10.7 per cent, trading at 7.2 cents.
Managing director John Greeve said the hedge facility was an important component of a short-term loan provided by Credit Suisse.
“By using the profits from this transaction to retire our short-term debt, we have an opportunity to simplify our funding arrangements and reduce the level of financial exposure to our lenders,” Mr Greeve said in a statement.
Mutiny also said it had made significant progress gaining bank approval for a senior debt financing arrangement for its Deflector gold project.
“One bank has received credit approval for its 50 per cent share of the debt funding package, two banks are very close to reaching agreement on commercial terms, whilst an additional bank has expressed interest in participating in the financing agreement,” the company said in a statement.
