PERTH (miningweekly.com) – Gold developer West African Resources has secured funding sufficient to support the start of gold production at its Sanbrado project, in Burkina Faso.
The ASX-, and TSX-V-listed company on Wednesday reported that it had secured a credit approved $200-million finance facility with Taurus Funds Management, and was hoping to raise A$43.17-million through a fully underwritten institutional share placement.
The company would also be conducting a non-underwritten share purchase plan (SPP) to raise a further A$5-million.
“We have worked for the past five months to get the best terms for shareholders. The award of the $200-million debt mandate to Taurus follows a thorough competitive process involving technical due diligence, site visits and detailed negotiations,” said West African MD Richard Hyde.
The Taurus facility will have a fixed interest rate of 7.75% a year on drawn amounts, payable quarterly starting from June 2021. Early repayment would be allowed at any time, without penalty.
First drawdown of the debt facility is expected by the end of the first quarter of 2019.
Meanwhile, West African will place some 172.7-million new shares, at a price of 25c each, to institutional investors to raise A$43.17-million.
The offer price represented a 15.3% discount to the company’s closing price on December 3, and a 14% discount to its five-day volume weighted average share price.
The placement will be undertaken in a single tranche under the company’s existing placement capacity.
In addition, existing shareholders will be allowed to subscribe for a maximum of A$15 000 of new shares under an SPP. Shares under the SPP would also be issued at 25c each.
“We have one of the best undeveloped gold projects globally, an experienced project build team and we are now fully funded and looking forward to getting Sanbrado into production in the second half of 2020,” said Hyde.
The $185-million Sanbrado project is currently expected to produce an average of 211 000 oz/y of gold over the first five years of operation, with production averaging 133 000 oz/y over the 11-year life-of-mine.