Golconda Resources Ltd. (TSXV:GA) announced an update on its joint venture with Tri-Rez Ebay Energy Ltd., commenting that GLJ Petroleum Consultants Ltd. is conducting a review of the oil and gas reserves on the Cold Lake First Nations lands, which the companies plan to explore and develop. Golconda also outlined how it will attain the funds to participate in the partnership.
As quoted in the press release:
In order to fund its participation in the Joint Venture, Golconda proposes to obtain a senior secured credit facility (the “Facility”) in the maximum amount of $5 million by way of private placement with qualifying lenders. The Facility will have a three year term and will bear interest at the rate of 12% per annum, calculated annually not in advance, commencing on the date of the initial drawdown and shall be due and payable on a quarterly basis with the first interest payment due six months after the date of the initial drawdown under the Facility. As security for the Facility, Golconda shall grant the lenders a first charge against its assets to rank pari passu with the first charge held by Lyncorp International Corp. The issuance of the Facility is subject to acceptance by the TSX Venture Exchange (“TSXV”).
First “M” Investments Ltd. has advanced Golconda an unsecured loan in the amount of $300,000, which amount will be used by Golconda for general working capital purposes.