Besra Gold (ASX:BEZ) has finalised a major funding deal – believed to be one of the largest of its kind signed by an ASX-listed junior.
Shares shot up over 150% on the initial announcement back in March and are already up over 25% this morning!
In March, Besra Gold signed a milestone US$300M gold pre-purchase and offtake funding deal with major shareholder Quantum Metal Recovery, which on completion fully funds the junior to bring its 3.0Moz Bau Gold Project in Malaysia into production.
The company has now received the first US$2M instalment of the $US5M initial deposit.
Quantum is one of the largest gold distributors in Malaysia.
Highlights:
- The facility provides a US$300m deposit paid against future production ounces, enabling Besra to fully fund production at Bau and the appraisal of other deposits within the Bau goldfield corridor.
- It is expected to remove the need for dilutive equity financing and project/corporate debt encumbering Besra with hedging requirements and/or onerous covenants and is expected to be delivered at up to US$10m/month.
- Besra confirms receipt of the first $US2M instalment of the US$5M initial deposit with the balance to be remitted to the company by no later than three business days after the conditions precedent have been satisfied.
- Besra continues to target a fully operational facility (including date of first drawdown of US$10m) by 30 June 2023 (subject to completion of remaining CPs).
“The announcement of progress this landmark agreement, as well as the accompanying corporate changes, moves Besra’s 3.0Moz Bau Gold Project closer to production,” Executive Chair, Jocelyn Bennet, said.
“In particular, this extraordinary funding deal should provide ample funding for the development of Bau and allows us to bring the project into production in a way that is uniquely non-dilutive to our shareholders and to retain exposure to gold price movements, free of hedging or other onerous covenants. Whilst we have several Conditions Precedent yet to fulfil we expect the US$300m Facility to be fully operational by June 30, 2023.
“I would also like to take this opportunity to thank Ray Shaw for his valuable contribution as CEO of Besra over many years and the work he has led to date on the Bau Project. We feel that the development and exploration potential of the project he has helped unlock should be the envy of our peers.
Bau history
The Bau Goldfield in East Malaysia is a world-class gold project with a century long history of successful gold mining.
For further information please visit: https://www.besra.com/
