LONDON (ShareCast) - (Sharecast News) - West Africa-focussed gold explorer and developer GoldStone Resources announced an operational update, and agreements reached with creditors, on Monday.

The AIM-traded firm said it had now received approval from the Ghana Minerals Commission to start irrigation and the leaching of ore placed on the heap leach pad at the Homase Mine.

It said it was on track to achieve target production of 25,000 ounces of gold for the first eight months of production, with first gold pour expected in the third quarter.

On the financial front, GoldStone said it had reached an agreement with bondholders for the settlement of its 20 outstanding unsecured bonds of $50,000 each.

The board said the offer was accepted by all bondholders, who had agreed to full and final settlement of the bonds in exchange for the issue of 12,000,000 new shares in GoldStone in total.

Verbal agreement had been received from BCM Investments, which would be allotted its 3,600,000 bond settlement shares immediately following the signing of a written bond settlement agreement.

Settlement of the bonds on such terms was deemed to be in the best interests of the company and all shareholders, the directors said, as it avoided the issue of 20,000,000 new warrants to subscribe for shares at a price of 3p each, as well as the payment of interest at a rate of 14% on the principal amounts outstanding.

GoldStone also announced that Asia Investments Management Services (AIMS) had agreed a further extension to the timing of the payment of interest on the $3m secured gold loan announced on 22 June 2020.

An extension to 30 June 2021 was agreed on 1 March, due to delays experienced over the issue of operational permits.

The company said AIMS had now agreed that all unpaid and accrued interest associated with the loan to 30 June would be repaid by 31 August.

Interest would continue to accrue on the outstanding payment at the default rate of 17%, until payment was made.

"I am delighted that the bondholders and AIMS have been supportive to the company to avoid impacting the company's operational progress, allowing us to continue to focus on moving towards our target of near-term gold production," said chief executive officer Emma Priestley.

At 1432 BST, shares in GoldStone Resources were up 8.91% at 12.25p.

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