West African secures finance to bring Kiaka to production
PERTH (miningweekly.com) – Gold miner West African Resources is fully funded to first gold at its Kiaka gold project, in Burkina Faso, after securing a $265-million syndicated corporate loan facility with Sprott Resource Lending Corp and Coris Bank International.
The loan facility will have a two-tranche structure, with the first tranche equaling $165-million and the second the equivalent of $100-million denominated in CFA francs.
Repayment of the facility will start two years after satisfaction of conditions to initial drawdown, with the final repayment no later than five years after the closing date. An average interest rate of 5.3% a year will apply over the reference rate.
A fixed production payment agreement (PPA) is in place of $12.44/oz on the first 1.5-million ounces of gold produced from Kiaka, with West African Resources retaining the right to buy back the PPA.
First drawdown of the facility is expected in the fourth quarter of this year.
“Kiaka is one of the best gold projects in development globally. Construction is well underway, and we look forward to completing the build at Kiaka and pouring first gold in the second half of 2025,” said West African executive chairperson and CEO Richard Hyde.
“West African is on track to become a more than 400 000 oz/y gold producer with the development of Kiaka. Our unhedged 10-year production outlook estimates production of more than 200 000 oz/y of gold in 2023 and 2024, and more than 400 000 oz/y gold from 2025 to 2032.”
Kiaka is expected to require a capital investment of $430-million to bring the project to production, with the mine expected to deliver around 220 000 oz/y over a mine life of 19 years.
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