Tietto locks in $ 140 million to finance African gold
After sifting through a set of project finance proposals, West African gold developer Tietto Minerals has reached an agreement with the Taurus Mining Finance Fund to acquire up to US $ 140 million in debt financing needed to the construction of its 3.35 million ounce Abujar gold project in Côte d ‘Ivoirien. The company says the deal offers certainty to its shareholders and comes within six weeks of the release of its final feasibility study on Abujar or “DFS”.
Before closing a deal with Taurus, Tietto reviewed a barrage of project finance proposals from offshore financial institutions, traditional banks, other lenders, streamers, and fixed income providers ranging from 120 to $ 180 million.
There was no shortage of potential suitors seeking a portion of the Abujar de Tietto gold project after filing its Pulse Acceleration DFS completed in October this year. The results of the study indicated a massive EBITDA of A $ 2 billion over the initial 11 year life of the mine, an extraordinary pre-tax net present value of A $ 1.3 billion and a payback period. expected less than a year for the US $ 200 million. in capital required to build the project. Remarkably, the DFS results also have an out-of-scale internal rate of return of 115%.
According to Tietto, Taurus is mandated to provide between US $ 130 million and US $ 140 million to be used to finance the development of its Abujar gold project and with more than 50 percent of the project financing secured by debt, Tietto will maintain its dilution of share capital to a minimum. Taurus is currently reducing its due diligence on the project and will provide a committed financing offer on time.
Under the terms of the deal, the duo agreed to a 5-year loan facility with repayments starting in mid-2023. Notably, the deal does not include any mandatory gold hedging and offers an early redemption option without penalty.
We are extremely happy to work with Taurus who can provide the necessary funds on time. Our experienced project construction team moved the initial work forward and are now confident that the debt financing will be in place as they proceed with the major work needed to develop the Abujar gold project in Africa’s next gold mine. from West.
Tietto looked after its flagship Abujar deposit and began planning for construction of the Abujar gold project after reaching a coveted 3 million ounce resource. The company plans to continue its frantic exploration of its land holdings in West Africa using its own fleet of low-cost diamond drilling rigs.
Outside the boardroom, the company recently provided another nice set of numbers from its fifth round of drilling on the Abujar-Gludehi deposit. The best result of the last round of diamond drilling was an 8 meter strike with 12.43 grams per tonne of gold from 187m including a 2m intersection grading an impressive 48.37 grams per tonne Golden.
The size of Abujar’s debt financing represents a blow to Tietto who otherwise would have had to issue a truckload of more shares to fund the project – a luxury he seems to be able to afford with an expected average annual EBITDA of about 138 million US dollars or 187 million Australian dollars.
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