Perseus Mining has announced itsigned documentation for a $150mn revolving cash advance facility to fund the Yaouré Gold Mine in Côte d’Ivoire.
Subject to the satisfaction of certain customary conditions, up to $150mn can be used for general corporate purposes, including the refinancing of $31.5mn of existing project loans and in due course, funding the development of Perseus’s third gold mine, the Yaouré Gold Mine in Côte d’Ivoire.
Perseus’s Chief Executive Officer and Managing Director, Jeff Quartermaine commented: “Development work at Yaouré has started with the purchase of long-lead items of plant and equipment, the progressive assembly of our development team and some early site works. Full scale activities can now be accelerated safely in the knowledge that all funds required to develop our third gold mine will be available when the conditions precedent to drawdown are satisfied.
“We are now looking forward to the challenge of firstly, developing Yaouré on time and on budget, and then bringing it into production as our third operating gold mine and achieving our stated aim of producing more than 500,000 ounces of gold at an all-in site cost of less than $850 per ounce.
“In addition to this, we recognise the enormous untapped exploration potential within the Yaouré tenements and with access to funding required to fund exploration from our two operating mines at Edikan and Sissingué, we expect to be able to materially add to the expected life of the Yaouré operation. Planning of this exploration is underway and we hope to be able to progressively announce the results of an exciting FY 2020 exploration programme.”
The consortium of three international banks that has provided Perseus with the US$150 million revolving cash advance facility is comprised of Macquarie Bank Limited from Australia, Nedbank Limited (acting through its Nedbank Corporate and Investment Banking Division) from South Africa and Société Générale of France. The borrowers are Perseus Mining Limited, the parent entity of the Perseus group of companies, and certain operating subsidiaries. Terms of the facility are typical of a corporate line of credit of this type. Interest payable on the loan is LIBOR plus a margin that initially will be 4.25% and will vary in line with the Company’s Leverage Ratio.
Perseus will continue to hedge the sale price of its gold production in line with its long stated and applied hedging policy of no more than 30% of projected gold production in any given year. Perseus’s hedge book currently includes deferred fixed forward sales contracts for 54,000 ounces of gold and spot deferred sales contracts for 221,000 ounces of gold. The weighted average sale price across all contracts is currently $1,297 per ounce. Based on current forecasts, Perseus’s hedge book will result in future gold production being hedged to 30% in FY20, 25% in FY21 and 20% in FY22.