article in the australian, page-2

Last traded at 8c

GOLD explorer Catalpa Resources recently secured a $67.5 million project finance facility from Macquarie Bank, providing the gold junior with a share price boost.

The Perth explorer's deal with Macquarie involved the bank underwriting the funding, which included a $55 million secured loan facility, a standby mezzanine facility of up to $10 million and a $2.5 million performance bond facility.

The facility, which includes a gold hedge at $1544 an ounce, ends in the 2015 financial year.

Catalpa managing director Bruce McFadzean recently told The Australian that the facility with Macquarie would contribute a "significant portion" of the $92 million required to develop the company's Edna May gold project near Westonia, between Perth and Kalgoorlie.

He said the Edna May project, which was slated to have average annual gold production of more than 100,000oz over a mine life of six years, would provide Catalpa with a platform to expand and become a mid-tier production company.

In its review of the stock following the funding announcement, Fat Prophets said Catalpa Resources had attracted increased investor support over the past few months.

From a low of 1.9c in late November, prices have rallied more than fivefold, reaching a high of 10.5c earlier this month.

Assuming the completion of a $30 million equity raising, the Edna May gold project should begin producing gold by mid-2010.