Fully funded *OCT 2013*; now:::: PMI acquisition announced Fri -->causing an 18c pop higher----in AFTER MARKET NO LESS!
Asanko's Esaase Gold Project Fully Funded With $150m Debt Facility
Highlights:
- Definitive Loan Agreement signed with Red Kite for secured debt facility of up to $150 million
- Combined with the current cash on-hand of $185 million , Esaase Gold Project fully financed
- No hedging, cash sweep or limitations on the Company's growth strategy - Definitive Feasibility Study and permitting remain on track for completion during Q4 2013
- Front End Engineering and Design program to commence immediately - Steady state production of 200,000 ounces per year targeted by Q4 2015
Marketwired
Asanko Gold Inc. October 24, 2013 6:30 AM
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct 24, 2013) - Asanko Gold Inc. ("Asanko" or the "Company") (AKG.TO)(NYSE MKT:AKG) is pleased to announce it has entered into a Definitive Senior Facilities Agreement (the "Agreement") with a special purpose vehicle of Red Kite Mine Finance Trust I ("Red Kite") to provide a secured project debt facility for a total of $150 million (all figures United States dollars). The project debt facility will be used for the development, construction and working capital requirements of the Esaase Gold Project. There are no gold hedging provisions, cash sweep requirements or restrictions usually associated with traditional project finance facilities of this nature that prevent the Company from pursuing its growth strategy. Prior to the execution of the Agreement, Red Kite conducted substantial technical and legal due diligence and as such, the Agreement is not subject to further due diligence. The Company will be holding a conference call and webcast today at 10:00am Eastern Standard Time to discuss the financing, please refer to the details below.
The Agreement provides for two term loan facilities: a $130 million term loan facility (the "Project Facility") and a $20 million cost overrun facility (the "Overrun facility"). The Overrun facility is provided as an option available to the Company, should it be required. Performance under the Agreement is fully secured by the assets of the Company's current subsidiaries and guaranteed by the Company until project completion.
In addition to the Agreement, Asanko and Red Kite have also entered into an Offtake Agreement under which the Company has agreed to sell the gold from Esaase for the life of the mine to Red Kite at spot prices during a nine day quotational period following shipment.
Commenting on the announcement, Peter Breese, President and CEO, said, "I am delighted to announce that the Esaase Gold Project is now fully financed through construction and commissioning, including working capital. This will enable us to progress with the development of the project upon conclusion of the DFS, which is due later this quarter. Our intention is to start the Front End Engineering and Design program before year-end and construction in Q1 2014 to achieve our target of steady state production of 200,000 ounces per year by Q4 2015.
"The completion of this financing, after extensive due diligence, in the current market environment demonstrates the robustness and strength of the Esaase Gold Project as well as the confidence in the team that we have assembled to build and operate the mine. Importantly, this loan does not have the traditional hedging, cash sweeps and growth restrictions typically associated with project finance so we can also continue to pursue our vision of becoming a mid-tier gold mining company through acquisitive growth."
As of September 30, 2013
Project Facility Details ($130 million):
Interest rate of LIBOR + 6% with a one percentage minimum LIBOR rate;
1.5% arrangement fee payable upon execution and a 1.5% fee payable on drawdowns;
Two year principal and interest payment holiday;
Four year quarterly repayment schedule or early repayment at any time without penalty; and
Conditions precedent to drawdown principally are completion of the Definitive Feasibility Study ("DFS") with material outcomes substantially the same as the May 2013 Pre-Feasibility Study ("PFS") and receipt of the Environmental Permit for Esaase.
Overrun Facility Details ($20 million):
Interest rate of LIBOR +10% with a one percentage minimum LIBOR rate;
1.5% arrangement fee payable upon execution and a 3% fee payable on drawdowns;
Two year principal and interest holiday;
Three year quarterly repayment schedule and early repayment at any time without penalty; and
Conditions precedent to drawdown are confirmation that the Company has sufficient funds with the Overrun Facility to complete the Esaase Gold Project, that the Project Facility is fully drawn and that 4,000,000 Asanko share warrants have been issued to Red Kite. The warrants would be priced at a 25% premium to the 20 day volume weighted average price of Asanko at that time and have a 2.5 year term to expiry.
Offtake Agreement Details:
100% of the Esaase Gold Project's future gold production over the life of the mine;
Red Kite to pay for 100% of the value of the gold nine business days after shipment;
A provisional payment of 90% of the estimated value will be made one business day after delivery; and
The gold sale price will be a spot price selected during a nine day quotational period following shipment.
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DaaYUM...this former LionOre team brought on board knows how to bring a project together. Now THAT's a "going into production" hole in the ground!
STAY TUNED!
:)
