Telson Mining set to advance funding plans for Tahuehueto mine construction after Trafigura Mexico deal

Telson Mining Corporation (CVE:TSN) (OTCMKTS:SOHFF) (FRA:TSGN) announced a boost Monday as it has now finalized an agreement with Trafigura Mexico SA de CV, over loans which will allow the miner to secure the necessary capital to complete construction of its partially built Tahuehueto gold mine in Mexico. 

The firm has now executed a trust agreement with Trafigura following the terms of the waiver request agreement, which both parties entered in April, this year. 

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Trafigura waived all defaults plus deferred, all principal and interest payments until June 30, 2021, while Telson agreed to place its assets into the Trust to guarantee full repayment of all outstanding financial obligations.

“After a thorough process, Telson and Trafigura have established a Mexican trust mechanism which secures Trafigura’s loans,” said Ralf Shearing, Telson CEO.

“This now allows Telson to rapidly advance funding plans to secure the necessary capital to complete the construction of its partially built Tahuehueto gold mine project.

“Our construction plans and budget estimates are substantially complete to allow Trafigura to thoroughly analyse Telson’s ability to complete construction with the funding currently targeted. Although a number of due diligence initiatives are still outstanding, Telson expects the funding plans to close and immediately thereafter to allow construction at the mine to recommence.”

Telson currently calculates a construction budget at around US$13 million, including a 15% contingency for constructing the gold mine.

To fully fund the budget, Telson said it was also mulling a US$12 million medium-term loan facility with Accendo Bank, or the possibility of a small silver stream metal purchase funding or conducting a private placement financing to supplement the Accendo loan.

Tahuehueto, in north-western Durango State, is aimed at generating gold, silver, lead and zinc concentrates within its own processing facility, with a designed capacity of at least 1,000 tonnes per day (tpd).

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