Asante Gold has announced that effective today, July 15, 2022, the Company completed the first US$100 million tranche of a US$140 million financing package from strategic financial institutions in Ghana.
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, according to the press release.
“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 July 12, 2023.”
Press release
Settlement will be in US 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 per cent. The annual interest rate of this gold forward facility is 7.53 per cent.
The Company said it assumed no derivative risks from the transaction as the loan principal is denominated in US funds and repayments from gold deliveries will be made in US funds, thereby providing a natural currency hedge. Through this facility, Asante obtained an immediate and non-dilutive financing, repayable from gold production.
The Company thanked the Financing Institutions for their confidence and financial support as Asante continues to develop its production profile in Ghana. The Company is also in advanced discussions on additional senior secured debt facilities to provide for ongoing sustaining capital.
Major developments in Asante Operations
Several developments have occured in the past months that are significant to the growth trajectory of Asante Gold mine.
The miner made a major milestone in the company’s operations. The Bibiani Mine recently completed its commissioning, with the first gold pour announced on July 7, 2022. A feat which is expected to contribute to a positive outlook of the gold sub-sector and moderate the headwinds in Ghana’s gold exports.
Another development is that the company recently floated about 350 million shares onto the Ghanaian stock market. This listing of the company is by ‘Introduction’ since it is already trading on the Canadian Stock Exchange (CSE).
Asante Gold said the decision was borne out of calls by local investors to have some participation in the company due to its contribution to the country’s revenue stream.
Asante also entered a deal with Kinross to acquire its Chirano mine. The transaction which involves a 90 per cent acquisition of Kinross’ Chirano Gold Mine was for a total consideration of $225 million with the remaining 10 per cent held by the government of Ghana as carried interest.
The structure of the purchase involved an upfront consideration for the Chirano Acquisition comprising of $115 million in cash and $50 million in common shares of Asante.
The Bibiani and Chirano assets combined under one ownership will cover an entire district scale gold trend exceeding 53km in length. This is good news for Asante as it expects to be a major gold producer in the country.
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