09:53 AM EDT, 07/18/2018 (MT Newswires) -- Kerr Mines (KER.TO) said Wednesday it had signed a letter of intent with Pandion Mine Finance to pre-sell 95,000 ounces of gold from its planned Copperstone mine in Arizona for US$27.6 million in order to fund construction costs of the project.

Kerr said the agreement will see it receive the cash in two tranches, with US$19.6 million paid next month and the remainder in July, 2019. The company will deliver the gold to Pandion over 40 months, beginning in 22 months, at a undisclosed discount.

"We believe the terms of this financing are competitive and create value for our shareholders," Claudio Ciavarella, the company's chief executive, said in a statement. "With this funding arrangement now in place, we are highly focused on continuing to create shareholder value and are now able to turn our attention to achieving our next targets - production in 2019, expansion of resources and mine life."

A definitive agreement is expected to be signed next month.

Kerr shares were up $0.005 to $0.215 at last look on the Toronto Stock Exchange,

Price: 0.21, Change: 0.00, Percent Change: +2.44