NSGold (NSX.V) announced yesterday they entered into a loan agreement with Van Hoof Industrial Holdings (VHIH), the investment vehicle of chairman Hans Van Hoof.
VHIH offered a loan facility up to C$500,000 bearing an interest rate of 6% when drawn upon, and NSGold pledged its 1.876M shares of NSX Silver (NSY.V) as collateral.
We consider this to be a fair deal as the proposed 6% interest rate is extremely low for a non-producing exploration company, and the posted collateral is only a fraction of the maximum amount the company can borrow.
The company is currently drilling at Mooseland, and as the drill rates have dropped to a year-low, we expect this drill program won’t be expensive. Results are expected shortly.
Disclosure: The author holds a long position in NSGold Corp. and NSX Silver Inc. Please see our disclaimer for current positions.
