Indonesia-focused gold and silver producer Sumatra Copper and Gold has secured $30m in financing from Credit Suisse to fund its Tembang Gold Project in Indonesia.
Located in southern Sumatra, the project will also receive $5m from Credit Suisse as cost overrun funding.
"This represents a major milestone in the company’s funding plans for the Tembang project, and is the first of several significant announcements that Sumatra expects to make over the coming months as Tembang moves into the development phase," the company said in a statement.
Sumatra will utilise the funds to advance the planned commercial development of Tembang project.
Construction is based on the Stage 1 Definitive Feasibility Study completed in September 2012 that confirmed the project’s economic viability.
According to the results of the study, the project is estimated to entail a total capital cost of $68m, including $38.5m as pre-production expenses.
The company expects to produce 146,000oz of gold and 1,388,000oz of silver from the project at an operating cost of $487 an oz over five years of mine life.
The project is estimated to generate revenue of $261m for the company.
Provision of the $30m senior debt facility is subject to completion of the project finance documentation and other customary conditions, including a Forestry Permit and completion of the equity component of the funding package.
The company expects to receive the final approval of its Forestry Permit in March 2013.