(MENAFN- ProactiveInvestors - N.America) Cancana Resources Corp. (CVE:CNY) said on Wednesday it has renegotiated the interest rate and extended its US dollar loan agreement from its largest shareholder and joint venture partner, Ferrometals BV, by five months to November 30.
Originally due on June 30, the $2mln extended loan agreement sees the interest rate reduced to zero percent.
To date, the company has drawn down $750,000 of the $2mln facility. The remaining balance of the loan will be used for general working capital purposes, including the settlement of a legacy issue in Brazil dating back to 2004.
"This extension of the short-term loan gives Cancana the time and capital to continue assessing various investing, restructuring and fundraising options,'' said Cancana president and chief executive officer Anthony Julien.
''The company continues to benefit from its partner Ferrometals'' continued funding of Cancana and the JV, including the exploration program,'' he added.
Ferrometals has contributed $27.55mln and Cancana $7.5mln to the Brazil Manganese Corp. joint venture. Based on these contributions, Ferrometals owns approximately 78.6% and Cancana owns the remaining 21.4% of BMC.
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