Asante secures US$140 million gold forward loan
Asante Gold Corp. [ASE-CSE, ASGOF-OTC, 1A9-Frankfurt] said Friday it has completed the first US$100 million tranche of a US$140 million financing package from strategic financial institutions in Ghana, West Africa.
It said the initial drawdown of US$100 million will be used to cover local operating costs and the company’s near-term broader funding and strategic objectives.
Repayment terms are to be 25% of the principal and interest in four equal installments of US$26.88 million, with the final payment due on July 12, 2023. Settlement will be in U.S. funds by delivery of gold at the financial institutions’ designated gold refinery in Switzerland and sold at the then Bloomberg BGN XAUUSD spot market price less 7%. The annual interest rate of this gold forward facility is 7.53%.
Asante sad it assumes no derivative risks from the transaction as the loan principal is denominated in U.S. funds and repayments from gold deliveries will be made in US funds, thereby providing a natural currency hedge.
The company said it is in advanced discussions on additional senior secured debt facilities to provide for ongoing sustaining capital.
On Friday, Asante shares eased 1.54% or $0.02 to $1.28 in light trading volume. The shares are currently trading in a 52-week range of $2.29 and 34 cents.
News of the gold forward facility comes after Asante recently agreed to buy Kinross Gold Corp.’s (K-TSX, KGC-NYSE) 90% interest in the Chirano Gold Mine for US$225 million. The Ghanaian government retains a 10% carried interest in the ope ration.
Chirano is an operating open-pit and underground mining operation located in southwestern Ghana, immediately south of Asante’s Bibiani Gold Mine, where the first gold pour was announced on July 7, 2022.
Bibiani is fully permitted with available mining and processing infrastructure on-site, consisting of a 3.0 million tonne per year mill and processing plant.
Chirano was first explored and developed in 1996 and began production in October, 2005. The mine consists of the Akwaaba, Suraw, Akoti South, Akoti North, Akoti Extended, Paboase, Tano, Obra South, Obra, Sariehu and Mamnao open pits as well as the Akwaaba and Paboase underground mines
Gold equivalent production on a 100% basis was 154,668 ounces in 2021.
“The Bibiani and Chirano assets will be combined under one ownership, to cover an entire district scale gold trend exceeding 53 kilometres in length and with past gold production of more than 8.0 million ounces,” Asante Non-executive Chairman Douglas MacQuarrie has said.
“With two modern process plants located 20 kilometres apart, exploration success anywhere along the gold trend can be efficiently accessed.”