Terrane Metals Corp. (TSX-V:TRX) has secured $40 million of leeway to help build its massive Mount Milligan copper-gold project in B.C.
The Vancouver-based company said today its credit agreement with giant Goldcorp Inc. (TSX:G) and the Bank of Montreal has been extended to May 7, 2011. The agreement means Goldcorp, which has a 52% stake in Terrane, will guarantee a non-revolving term credit facility of up to $40 million.
Terrane already had a similar credit facility in place, but that agreement expired on Friday.
In a recent interview with BIV, Terrane president and CEO Robert Pease shed some light on the company’s relationship with Goldcorp.
They really said, ‘we’re very pleased with the project, we think it’s an outstanding project,’” said Pease.
Mt. Milligan is a $915 million project located 155 kilometres northwest of Prince George.
In January, Goldcorp declined a one-time option to convert its stake into a joint venture on Mount Milligan, and some investors wondered if Goldcorp had lost confidence in Terrane.
Pease said that wasn’t the case, and the two companies have a collegial relationship that dates back to former gold producer Placer Dome Inc., where members of the two companies worked together.
He said the relationship between Terrane and Goldcorp is an anomaly in the mining space, but it reflects a strong sense of trust.
"What makes it a special situation? There’s comfort with the asset, there’s comfort with the management team,” said Pease. “It’s one of these relatively rare times … where you do have that kind of relationship get developed between a major and a junior.”
Last month, Goldcorp provided Terrane with a $30 million private placement that was part of a $100 million financing to get construction at Mt. Milligan underway.
Terrane’s share price during the last week: between $0.97 and $0.96; 52-week high: $1.80; 52-week low: $0.22.