Tietto Minerals Ltd (ASX:TIE) has secured debt funding of up to US$140 million to build West Africa’s next gold mine at the Abujar Project in Cote d’Ivoire.
The company has mandated Taurus Mining Finance Fund No.2 LP, a dedicated resources fund manager to deliver an underwritten project development facility of between US$130 million to US$140 million over a five-year loan period.
Promisingly, Tietto is well-funded and is targeting first gold at Abujar in the December quarter of 2022.
“Certainty for shareholders”
Tietto managing director Dr Caigen Wang said: “Securing the financing with Taurus provides certainty for shareholders and comes within six weeks of delivering the Abujar DFS.
“We are extremely pleased to be working with Taurus who can deliver the funds needed on our timeline.
“Our experienced project build team has been advancing early works and now have confidence the debt funding will be in place as they proceed with the major works needed to develop the Abujar Gold Project into West Africa’s next gold mine.”
Debt funding
Tietto has mandated Taurus to provide a secured project financing facility to be used towards funding the development of Abujar.
Taurus will work to finalise its due diligence over the project prior to providing a committed offer for finance.
Whilst the full terms of the financing are confidential, the key points are:
- Project loan facility of between US$130 million and US$140 million;
- Five-year loan facility with repayments commencing on June 30, 2023;
- Loan covenants customary for a facility of this type and reflect the competitive nature of the current market;
- Mandatory gold hedging required;
- Early repayment is allowed at any time without penalty; and
- Security to be provided by the guarantee.
Completion of final financing agreements remains conditional upon due diligence, documentation and other conditions precedent usual for financings of this nature.
Abujar Definitive Feasibility Study
The Abujar Definitive Feasibility Study (DFS) demonstrated robust financial results and estimated first-year gold production of 260,000 ounces and 200,000 ounces per year over the first six years of Abujar’s 11-year mine life for an NPV5% A$1.3 billion (pre-tax) and A$0.97 billion (post-tax) using US$1,700 per ounce and A$/US$=0.74.
For the total capex of US$200 million from the DFS, the US$8.65 million early work program is nearing completion including front end engineering and design (FEED), site and camp construction.
Tietto is well-funded, with ~A$32.8 million cash at the bank at end of September 2021 and anticipates up to a further A$10 million in an options exercise by the end of December 2021.
