JOHANNESBURG (miningweekly.com) – West Africa-focused gold mining company Amara Mining on Monday said the International Finance Corporation (IFC) has proposed to invest $10-million in the company, through the purchase of 41.5-million shares at 16p apiece.
The Aim-listed company noted that this investment was a “strong endorsement of the technical strengths, socio-environmental standards and economic potential” of its 6.8-million-ounce Yaoure gold project, adding that it would further strengthen its financial position.
Following the proposed investment, Amara would be fully funded to the end of 2016, allowing time for discussions with banks and other financial institutions for the financing of Yaoure to the production stage.
“The board has carefully considered the merits of a strategic investment by IFC and we have concluded that it is in the best interest of Amara’s shareholders. IFC is renowned for conducting stringent due diligence before making an investment and gaining this approval acts as a strong endorsement for Yaoure’s technical and socio-environmental standards,” Amara CEO John McGloin said in a statement.
“This will ensure that Amara is not made vulnerable by a low cash position at a time when it is important to keep advancing the project as rapidly as possible. The investment also demonstrates Amara’s ongoing ability to attract new strategic investors for the long-term financing of Yaoure,” he added.
Amara remained on track to deliver a prefeasibility study for the project in the second quarter.
With estimated average production of 279 000 oz/y, over a ten-year mine-life and all-in sustaining costs of $624/oz, the project could deliver an internal rate of return of 33% and a net present value of $613-million, at a gold price of $1 250/oz.
Toronto-based independent investment dealer GMP Securities noted that the financing was positive, as it allowed the company to start project financing discussions, making it less vulnerable in the event of a strategic approach.