Asante Gold Corp (CSE: ASE) this morning announced that it has obtained a significant source of funding through a forward gold purchase agreement. The arrangement, which comes from undisclosed institutions in Ghana, will see the company commit to a one-year loan that is to be settled in gold.
The financing itself is for a total figure of US$140 million, of which the first $100 million has already been forwarded to the company. Funding from the arrangement is set to be used for operating costs as well as near term “funding and strategic objectives.”
Under the terms of the arrangement, the loan is set to be repaid by July 12, 2023, with repayment to be made via four equal payments of $26.88 million for the first tranche. Repayment is to be made in US funds via the delivery of gold at a refinery in Switzerland, which will be sold at spot less 7%. Interest on the loan is set at 7.53%.
With the first gold pour completed by the company on June 7, which occurred at the firms Bibiani gold mine in Ghana. Current plans call for annual production of 175,000 ounces of gold in the first twelve months over the course of the next year. The company is also in the process of acquiring the Chirano Mine from Kinross Gold (TSX: K), in a $225 million deal announced in April of this year.
Details on when the second tranche will be made available for the forward purchase agreement were not provided. The firm is said to be looking into additional sources of senior secured debt as well.
Asante Gold last traded at $1.30 on the CSE.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.