Prosperity secures loan to develop Aceh gold-copper project

Australian firm Prosperity Resources Limited said Monday that it has executed a second loan agreement with China-based Resource Global Finance Ltd (RGF) to develop Pinang-Pinang gold-copper project in southern regency of Aceh province.

The agreement allows the company to draw down US$500,000 at nil interest until 30 June 2010. The funds will be used for further exploration work on the Pinang-Pinang project and for working capital, the company said.

RGF will have a second ranking fixed charge over "the company's interest in the cooperation agreement between the company and PT Dana Mitra Utama (DMU) for this loan," it said

In October 2008, the company has executed a cooperation agreement with DMU to apply for Mining Licenses (KP), acquire KP companies, develop, exploit, transport and sell mineral deposits in the Indonesian archipelago.

Chairman, Mo Munshi said: ?These funds will allow the company to pursue the next phase of exploration at Pinang-Pinang. The board believes that an equity raising at the current low share price is not in the best interest of shareholders at this time.?

Prosperity Resources commenced a due diligence exploration program in early April 2009, which includes detailed grid-based soil sampling, ground magnetic surveys and additional trenching to identify the strike extent of the mineralized system and define new targets. (denny)