A binding funding agreement with Chancery Royalty clears the path to production at the La Patona gold plant in Peru, sending Nativo shares sharply higher.
Nativo Resources (AIM: NTVO) shares nearly doubled on Wednesday after the miner struck a binding letter of intent with Chancery Royalty covering the funding needed to build and commission its La Patona gold processing plant in Acari, southern Peru.
The stock jumped 95% to 0.39p as investors welcomed clarity on financing that had previously clouded the project's timeline, with the package comprising $3.5m of project finance drawn down in $500,000 monthly tranches alongside a £600,000 share subscription priced at 0.21p, split into two tranches.
In exchange for the backing, Chancery Royalty will take a 6% gross revenue royalty on gold produced at La Patona up to 3,034 troy ounces, stepping down to 1.5% thereafter, and will also receive 142.9 million warrants exercisable at 0.32p per share. Broker Zeus has pencilled in dilution of around 17% from the arrangement, a cost the market appears willing to accept given the progress it unlocks.
The deal effectively removes the funding overhang that had left La Patona's construction and start-up in limbo, giving Nativo a defined route to first production rather than a further wait for capital. For a junior gold developer, securing committed project finance alongside equity funding in a single package is a significant de-risking step, even before ounces are poured.
Attention now turns to drawdown of the monthly tranches and the construction timetable at Acari, with the market likely to watch closely for confirmation that milestones are being met on schedule as the plant moves towards commissioning.
This report is based on Nativo Resources’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Albert Hyseni on Unsplash.
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