Posgold Set To Take The Plunge
Sydney Morning Herald
Saturday February 9, 1991
Mr Robert Champion de Crespigny's Poseidon Gold has readied itself for a major acquisition by arranging a 161,000-ounce gold funding facility worth about $75 million.
The limited recourse facility will be used to consolidate existing project loans and does not restrict the company from raising further finance to fund acquisitions.
"It replaces separate project financing and gives us the flexibility to do other things without limiting our borrowing ability," said the executive director of Poseidon Gold, Mr Steven Dean, said yesterday.
"In effect it puts a ring fence around those operations."
Brokers have been speculating that PosGold was preparing for a sizable purchase and it has been busy organising lines of credit to this end.
The company, which is a member of the Normandy Resources stable, has made no secret of its desire to double its production from 331,000 ounces this year, making it a world ranking gold group.
Poseidon Gold sought to do this last year by outlaying $165 million for a 20 per cent stake in Newmont Australia Ltd and then launching a scrip offer for the company. This was thwarted when Newmont and BHP Gold agreed on a friendly merger.
Mr Dean said suggestions that the company had arranged large credit lines were wrong, but he added the company viewed the Newmont investment as a very important part of the its future growth.
The revolving gold funding facility was arranged by J.P. Morgan Australia Ltd and was provided by Morgan Guaranty Trust Co of New York, Credit Suisse Bullion Pacific and Canadian-owned resources financing specialist Toronto Dominion Australia Ltd.
It completes a refinancing program that has allowed Poseidon Gold to reduce its bank debt to about $75 million at December 31, from $101 million six months earlier.
© 1991 Sydney Morning Herald
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