i-80 Gold (TSX: IAU) (NYSE-A: IAUX) surged to its highest in nearly three years on Thursday after securing a $500 million financing package to fund its mine development plans and erase its debt obligations.Together with its equity offering in the second quarter of 2025, the Reno, Nevada-based gold developer said it has now raised $800 million to support its objective of achieving mid-tier producer status.To meet that objective, the company announced in 2024 a three-phased plan that aims to increase its production to 600,000 oz. per year across its three underground mines and one oxide open pit operation, all in Nevada. Currently, it produces around 50,000 oz. a year.Initial phases fundedThe $500 million package, according to i-80 Gold, will fund the first two phases of that plan, which are expected to bring its annual production up to approximately 300,000–400,000 oz. — for a potential six-to-eight-fold increase.Phase 1 — which is underway and expected to last until 2029 — focuses on the ramp-up of the Granite Creek mine and development of the Archimedes project. Phase 2, currently slated for 2030-2031, comprises an expansion of the Cove underground mine and the Granite Creek open pit. The third and final phase would be driven by Mineral Point, a large-scale oxide open pit heap leach project.i-80 Gold kicks off underground development at ArchimedesIn a press release Thursday, i-80 Gold president and CEO Richard Young reiterated that the three-phased plan provides “a clear and achievable path” to positioning the company as a mid-tier gold producer. He added that with the new financing, it now has a “clear financial path to fully fund Phase 1 and Phase 2.”Shares of i-80 Gold jumped as much as 8% to C$3.04 apiece in Toronto, its highest since June 2023. The company, which spun out of Premier Gold Mines following its acquisition by Equinox Gold (TSX, NYSE-A: EQX) in 2021, has a market capitalization of C$2.4 billion ($1.8 billion).Funding detailsThe $500 million funding package comprises a $250 million royalty sale to Franco-Nevada (TSX, NYSE: FNV). The agreement is for a 1.5% life-of-mine net smelter return royalty covering all mineral properties in the i-80 portfolio, stepping up to 3% on January 1, 2031.Of the total amount, $225 million is expected to be available at closing in March. The remaining $25 million is expected to be made available later in 2026 to advance the Mineral Point project following its early-stage permitting activities.In addition, the company has secured commitments for a gold prepay facility with National Bank and Macquarie for an initial advance of $150 million, with a $100 million accordion feature. i-80 Gold estimates that the total ounces to be delivered for the full $250 million facility would represent approximately 15% of its gold output over the projected period of January 2028 to June 2030. Closing of the facility is anticipated to be completed by the end of the first quarter of 2026.Extinguished debtThe proceeds, according to the company, would not only help fund all five gold projects through various stages of development, but also extinguish the company’s existing debt obligations of approximately $175 million.“The commitments from Franco-Nevada, National Bank and Macquarie, following a detailed due diligence process, underscore the quality of our asset base, the depth of our team and the credibility of our execution plan,” i-80 Gold’s CFO Ryan Snow said.The Nevada miner also noted that it selected the facility with National Bank and Macquarie with a goal of transitioning the gold prepay into a corporate revolver following the completion of Phase 1 to fund the development of Mineral Point, which hosts the company’s largest gold-silver resources at about 4.6 million oz. of gold-equivalent (measured and indicated). A preliminary economic assessment filed in early 2025 outlined a 17-year mine life with a LOM gold equivalent output of 282,000 ounces annually.
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