Perseus Mining Limited (ASX:PRU) has signed documentation for a US$150 million revolving cash advance facility that was first announced in April 2019.
The funds can be used for general purposes, including the refinancing of US$31.5 million of existing project loans and eventually funding development of Perseus’ third gold mine Yaouré in Cote d’Ivoire.
Perseus managing director & CEO Jeff Quartermaine said the debt facility locks in the final piece of the company’s funding plan to develop the Yaouré Gold Mine and is an important milestone for Perseus.
He added: “Development work at Yaouré has started with the purchase of long-lead items of plant and equipment, the progressive assembly of our development team and some early site works.
“Full-scale activities can now be accelerated safely in the knowledge that all funds required to develop our third gold mine will be available when the conditions precedent to drawdown are satisfied.”
The cash advance facility was provided by a consortium of three international banks, Australia’s Macquarie Bank Limited, Nedbank Limited (acting through its Nedbank Corporate and Investment Banking Division) from South Africa and Société Générale of France.
Terms of the facility are typical of a corporate line of credit of this type.
Interest payable on the loan is LIBOR plus a margin that initially will be 4.25% and will vary in line with the company’s leverage ratio.
Perseus will continue to hedge the sale price of its gold production in line with its long-stated and applied hedging policy of no more than 30% of projected gold production in any given year.
The company’s hedge book currently includes deferred fixed forward sales contracts for 54,000 ounces of gold and spot deferred sales contracts for 221,000 ounces of gold.
The weighted average sale price across all contracts is currently US$1,297 per ounce.
Perseus’ hedge book, based on current forecasts, will result in future gold production being hedged to 30% in financial year 2020, 25% in 2021 and 20% in 2022.
Quartermaine continued: “We are now looking forward to the challenge of firstly, developing Yaouré on time and on budget, and then bringing it into production as our third operating gold mine and achieving our stated aim of producing more than 500,000 ounces of gold at an all-in site cost of less than US$850 per ounce.
“In addition to this, we recognise the enormous untapped exploration potential within the Yaouré tenements and with access to funding required to fund exploration from our two operating mines at Edikan and Sissingué, we expect to be able to materially add to the expected life of the Yaouré operation.
“Planning of this exploration is underway and we hope to be able to progressively announce the results of an exciting FY2020 exploration program.”