Asante Gold (ASE-Cse) could reveal a major financing. Asante has drawn down $100-million (U.S.) of a $140-million (U.S.) package just arranged with "strategic financial institutions in Ghana." The strategy, one assumes, is for the lenders to get as much interest as they can, with as much collateral as they can get.
If so, the lenders were successful. They get 7.53 per cent in annual interest and the loan must be repaid in four quarterly installments, the last coming due in a year. Asante will make the payments from its gold production -- $26.88-million (U.S.) in gold valued at the spot price less 7 per cent to cover this first $100-million (U.S.) drawdown.
The cash is needed to cover local operating costs in Ghana and, as Mr. Anthony, chief executive officer since March, and Mr. MacQuarrie, chairman and former CEO, put it: The new cash will cover "near-term broader funding and strategic objectives." And this may not be all: Asante also says that it is in "advanced discussions" regarding additional senior secured debt facilities to provide for ongoing sustaining capital. (It wants more cash quickly, in other words.)
Asante will be making its gold-based payment from production at its new Bibiani mine, which has just wrapped up commissioning and which had its first gold pour last week. Asante acquired Bibiani last summer from Resolute Mining Ltd. for $90-million (U.S.). At the time, Mr. MacQuarrie described the mine as a "sleeping giant" -- essentially unmined and on care and maintenance since Ashanti Goldfields quit the project 15 years earlier.
A resource estimate prepared last fall listed 19.6 million tonnes indicated at 2.76 grams of gold per tonne and another 8.4 million tonnes inferred at 2.79 grams per tonne, a total of 2.5 million ounces of gold. Another 70,000 ounces at lower grades sit within satellite pits.
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