Besra Gold (ASX:BEZ) has announced a major funding deal – believed to be one of the largest of its kind signed by an ASX-listed junior.
The company has executed a non-binding term sheet for the provision of up to US$300m gold pre-purchase drawdown and offtake funding agreement signed with its major shareholder Quantum Metal Recovery Inc. Quantum is one of the largest gold distributors in Malaysia.
On completion the deal fully funds the junior to bring its 3Moz Bau Gold Project in Malaysia into production.
The Facility was negotiated on behalf of the company by Besra shareholder and advisor, Noblemen Ventures Pty Ltd.
Quantum is one of the largest gold distributors in Malaysia.
Highlights:
- The facility provides a US$300m deposit paid against future production ounces, enabling Besra to fully fund production at Bau and the appraisal of other deposits within the Bau goldfield corridor.
- Expected to remove the need for dilutive equity financing and project/corporate debt encumbering Besra with hedging requirements and/or onerous covenants and is expected to be delivered at up to US$10m/month.
- The facility is to be settled by way of delivery to Quantum of up to 3Moz of gold according to an agreed percentage of production at an agreed floating gold reference price, but subject to a Floor Price.
- Subject to draw-down under the facility, Besra will be funded to immediately commence an update of the previous feasibility studies with initial results of this work due in the 2H CY23.
- Upon implementation of a pilot plant and further successful updates to the feasibility studies, Besra plans to utilise the funds raised to commence commercial-scale production within 12-18 months.
Key Facility Terms
- Up to three million ounce gold offtake purchase facility for JORC-2012 gold mineral resources at the Reference Price, less 10%;
- The Reference Price is set at the time of each drawdown and is the 5-day average of the London Metal Market gold price in US$ per troy ounce and is subject to a floor price of 115% of AISC3 at the time of delivery; and • Up to US$300m is to be made available to Besra by way of Quantum paying Besra a 5% deposit of the Reference Price on future gold production of up to three million ounces.
