Gold developer West African Resources adds a A$326 million financial arm to the development of the company’s Sanbrado Gold Project in Burkina Faso, West Africa.
In a market release dated 5 December 2018, West African Resources Limited (ASX: WAF) announced that Sanbrado Gold Project is now fully funded to produce high-grade +200,000 ounces gold per annum. The finance package that the company has secured includes A$278 million debt facility with Taurus Funds Management Pty Ltd and ~A$43.17 million raising via fully underwritten placement.
Managing Director Richard Hyde commented, “West African Resources’ Sanbrado is one of the significant undeveloped gold projects across the globe which is now fully funded and is expected to commence production in the second half of 2020.”
Currently, the company underway the equity raising of A$43.17 million through the institutional placement, fully underwritten. Under the placement, the company intends to issue 172.7 million new WAF shares at an issue price of A$0.25 per share. Meanwhile, the company is also undertaking a Share Purchase Plan subject to an overall cap of A$5.0 million. Under this SPP, each retail shareholder will be entitled to participate up to A$15,000 at an offer price of A$0.25 per share.
On debt facility front, private investment manager Taurus has committed to provide A$278 million credit following the completion of its legal and technical due diligence over the Project. This credit facility has been drawn on highly flexible terms that includes early repayment option, and an ability to utilize free cash. The key terms of the facility includes fixed interest rate of 7.75% pa on amount drawn. Whereas, quarterly repayments will commence from 30 June 2021, with final repayment slated for 31 December 2024.
Mr. Hyde stated that the company has been working since last five months to secure such debt facility that is most benefitting to its shareholders.
As per the company’s information, the award of the US$200 million debt facility follows a competitive selection process conducted by the company’s independent financial advisor, Orimco Pty Ltd. Further, the company highlighted that the business is well on track to report its first production at Sanbrado in September quarter 2020.
Currently, West African securities are into trading halt. WAF last traded at $0.295 with market capitalization of $203.79 million.