West African Resources Limited (ASX:WAF) has mandated Sprott Resource Lending Corp. and Coris Bank International SA to provide a US$265 million syndicated corporate loan facility for the development of the Kiaka gold project in Burkina Faso, West Africa.
The Syndicate completed thorough technical and environmental due diligence on both the Sanbrado gold operation and the Kiaka gold project and has provided a credit approved committed offer of finance.
Executive Chairman and CEO Richard Hyde said WAF is fully funded to complete development of Kiaka to commercial production from the Loan Facility, existing cash and internal cash flow from Sanbrado during the build period.
WAF has undertaken a comprehensive debt process that sees Kiaka fully funded to first gold,” Mr Hyde said.
“We are pleased to award the US$265 million debt mandate to experienced mining-sector financiers, Sprott and Coris Bank, based on their committed and credit-approved offers.
“Kiaka is one of the best gold projects in development globally. Construction is well-underway, and we look forward to completing the build at Kiaka and pouring first gold the second half of 2025.
“WAF is on track to become a +400,000 ounce per annum gold producer with the development of Kiaka. Our unhedged 10-year production outlook estimates production of more than 200,000 oz gold per annum in 2023 and 2024, and more than 400,000 oz gold per annum from 2025 to 2032.”
Key terms of the Loan Facility include:
- Two tranche structure: Tranche 1 of US$165 million; and Tranche 2 the equivalent of US$100 million denominated in CFA Francs (XOF).
- Repayments commence two years after satisfaction of conditions to initial drawdown (Closing Date),with final repayment to occur five years after the Closing Date.
- ·Early repayments permitted from three years after the Closing Date.
- Average interest rate margin on the two tranches of 5.3% per annum over the reference rate.
- Fixed production payment agreement (PPA) of US$12.44 per ounce on the first 1.5million ounces of gold produced from Kiaka. WAF retains right to buy back the PPA.
- No mandatory gold hedging.
Kiaka’s feasibility study confirmed it is a long-life, low-cost gold project averaging 219,000oz of gold production per annum for 18.5 years from 2025. Early works construction, design and planning are underway at Kiaka, including camp, access and clearance roads, site security infrastructure and award and order of project mills.
