The Company and Orimco have moved the process to the second stage, short-listing the financing offers, with the aim of appointing the preferred financier or syndicate to arrange and underwrite debt facilities in Q1 2023.
First stage of debt financing process complete for the Kiaka gold project. (Credit: Albert Hyseni on Unsplash)
Unhedged gold mining company West African Resources Limited (‘West African’ or the ‘Company’, ASX: WAF) is pleased to provide an update on its debt finance process, EPCM contract award and order mill package for the development of WAF’s second gold mine, the 7.7Moz Kiaka gold project, in Burkina Faso (‘Kiaka’).
West African Executive Chairman Richard Hyde commented: “We are extremely pleased with the strong interest from leading international resource financiers and
their ongoing participation in the debt financing process for the 7.7Moz Kiaka gold project.
“Strong competitive bids support WAF’s targeted debt of US$300m and highlights Kiaka’s high quality and strong early cashflow generation. Securing the debt will ensure WAF is very well positioned to fund Kiaka, particularly given our significant ongoing cashflow contribution from Sanbrado and our robust balance sheet.
“We are pleased to announce the EPCM contract award to Lycopodium and award and placement of the mill package with Metso Outotec. We are pleased to team up again with Lycopodium and Metso Outotec following our successful partnership on the construction of Sanbrado, which was completed ahead of schedule and under budget.
“WAF is in an exciting growth phase, as we aim to a be a multi-project +400,000ozpa gold producer in 2025”.
WAF and our debt advisors Orimco, recently completed the first stage of the debt finance process with selected international resource financiers for debt funding packages for the construction of Kiaka. WAF received strong interest from eight tier-one financiers, with competitive non-binding offers supporting our target of US$300 million debt.
The Company and Orimco have moved the process to the second stage, short-listing the financing offers, with the aim of appointing the preferred financier or syndicate to arrange and underwrite debt facilities in Q1 2023. In parallel, we are progressing legal and technical due diligence and facility documentation. As part of this process Independent Technical Experts (ITE) successfully completed site visits of Sanbrado and
Kiaka in Q3 2022.
WAF’s feasibility study released in August 2022 (ASX: 3/8/22) outlined pre-production capital costs of US$430 million and a rapid 2.5 year pre-tax pay back at a US$1,750/oz gold price. The project is expected to average US$953/oz AISC for the first five years and US$1,052/oz over an 18.5 year life of mine (LOM) delivering US$2.4b in pre-tax free cashflow at a US$1,750/oz gold price.
Source: Company Press Release