TORONTO - White Tiger Gold Ltd. (TSX:WTG) says this year's gold production at the Savkino mine in Russia will be about 10 per cent below the original target of 20,000 ounces.
The shortfall will put the TSX-listed company in default of a condition in its US$80-million credit agreement with VTB Capital, a Russian investment fund manager headquartered in Moscow.
White Tiger says it has notified VTB and hopes to address any potential concerns but there's a possibility that the lender will exercise its option to seize assets that were used as security.
The mining company says it's taking steps to meet its previous 2013 guidance of 48,000 ounces, including a waiver from VTB that will ensure White Tiger has access to the remaining US$21 million that's undrawn on the facility.
"In the mean time, we will complete the construction, installation and commissioning of the second crushing and screening unit in January, and install pump stations, complete the expansion of heap leaching pads and finish the construction of new accommodation facilities for the Phase 2 Expansion of the Savkino Mine," said Jim McBurney, White Tiger's chief executive officer since July.
"As we refocus on our Russian assets, we will continue to review operations to ensure that the company maintains the right capability and structure to deliver value to our shareholders."
The company had briefly owned the Lamaque gold mine in Val d'Or, following a merger with Century Mines that closed in October 2011. Century was unable to meet its obligations under a lending agreement with Deutsche Bank, which decided to seize the Lamaque and the San Juan project in Peru as a result.
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