TSX- and Aim-listed Aureus Mining has secured a bank-mandated project debt finance facility of up to $100-million, together with an associated $8-million cost overrun facility, to support the development of its New Liberty gold project, in Liberia.

The total cost of the funding is expected to be 5% a year with a term of six years.

The facilities will not have mandatory gold hedging as part of the lending terms.

Once the loan has been drawn down, interest payments will start, while capital repayments will only start during the production phase.

Mandated banks Nedbank Capital and Rand Merchant Bank (RMB) will provide the debt facilities to New Liberty mine operator Bea Mountain Mining Corporation and will approach the Export Credit Insurance Corporation of South Africa (ECIC) for financing support.

Support by the ECIC would include political and commercial risk insurance for the banks.

Aureus president and CEO David Reading said the financing was a key step in the company’s strategy of building Liberia’s first gold mine and the achievement of an overall cost of capital of 5% endorsed the quality of the project.

“We are delighted to welcome Nedbank and RMB as key partners in providing the debt component of what will be a significant step in harnessing Liberia’s potential in becoming West Africa’s newest gold district,” he com-mented.

The announcement followed Aureus having received a number of debt financing proposals following a selection process, which had been under way since the fourth quarter of last year.

It has received positive responses from a large number of major financial institutions, which, it believes reflects the robustness of the New Liberty project.

Aureus is advancing with optimisation studies at New Liberty, which are almost complete and has simultaneously started an early works programme, with the first gold pour on track for December 31, 2014.

The due diligence process is already under way and, along with the optimisation work, is expected to be completed by the end of May 2013.