AMN - COTE D’IVOIRE: Yaouré financing plan finalised

Perseus Mining Limited has accepted a Committed Letter of Offer from three leading international banks to provide a US$150 million corporate debt facility. This will be available to the company for general corporate purposes, including providing funding for the development of its third gold mine, Yaouré in Côte d’Ivoire.

With debt funding commitments in place, subject to execution of formal documentation and customary conditions precedent for a facility of this nature, including the grant of an Exploitation Permit by the Ivorian government and final board approval, Perseus plans to proceed with development of Yaouré.

This will be in accordance with its strategic plan of producing more than 500,000 ounces of gold per year at an all-in site cost of less than US$850 per ounce from 2022.

The total capital cost of developing the Yaouré mine is estimated to be US$265 million, including a contingency. It will be funded from the US$150 million corporate debt facility, over US$80 million of cash and bullion on hand, along with additional contributions from future operational cash flows and proceeds from the exercise of warrants that expire later this month.

A consortium of three international banks, including Macquarie Bank Limited from Australia, Nedbank Limited (Corporate and Investment Bank) from South Africa and Société Générale of France, has committed to provide Perseus with a revolving cash advance facility of US$150 million.

A Committed Letter of Offer and comprehensive Terms Sheet was executed by all parties on April 5, 2019. Preparation of definitive finance documentation is now in progress and will reflect the terms as outlined in the Letter of Offer with the objective of the facility being available for first drawdown no later than June 30, 2019.

The facility takes the form of a revolving line of credit with the borrowers being Perseus Mining, the parent entity of the Perseus group of companies and certain operating subsidiaries.

Perseus will continue to hedge the sale price of its gold production in line with its long-stated and applied hedging policy of hedging no more than 30% of projected gold production in any given year.

At an average gold price of US$1,250 per ounce for the two-year period from July 1, 2019, to June 30, 2021, Perseus forecasts that it will generate significant operating cashflows from its two existing mines, Edikan and Sissingué, after paying royalties, corporate overheads and taxes.

Nine successive quarters of strong operating performance in line with market guidance from the Edikan and Sissingué mines underpin the company’s confidence in this forecast.

The final application for the granting of an Exploitation Permit to Perseus’ Ivorian subsidiary, Perseus Yaouré SARL, to develop and operate Yaouré, is due to be considered by the Ivorian Cabinet on April 10, 2019. The EP is the final permit that Perseus requires to start developing the Yaouré mine.

Once the EP is granted, Perseus and the Ivorian departments of Mining and Geology and Budget and Finance will negotiate the terms of a Mining Convention to confirm fiscal stability and other arrangements that will apply during the life of the Yaouré Gold Mine.

Perseus CEO and managing director Jeff Quartermaine said: “The agreement on the terms of the debt facility with our banking syndicate was a critical step that needed to be completed to enable the development of the Yaouré Gold Mine.

"Perseus acquired Amara Mining plc in April 2016 with the specific objective of developing Yaouré, which was then considered one of the best undeveloped gold resources in West Africa.

"Since acquiring the project, our technical teams have validated our original belief and methodically created a compelling commercial case to develop the gold mine. With our international banking syndicate agreeing to provide debt finance, we have put in place the final piece of the funding plan required to deliver our original vision."

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