OreCorp Limited (ASX: ORR) has confirmed significant progress in financing its multi-million ounce Nyanzaga Gold Project in Tanzania.
Nyanzaga delivered a robust DFS in August 2022, with the Project proposed to produce 242,000 ounces of gold per year for 10 years with a highly competitive all-in sustaining cost (AISC) of US$954/oz. This high margin provides Nyanzaga with an excellent debt carrying capacity and flexibility how this is deployed.
Discussions to date with major European, African and Tanzanian banks have delivered non- binding expressions of interest to provide debt finance of more than US$400 million for the Project, well in excess of the US$300 million debt target set by OreCorp in consultation with its financing advisors, Auramet International LLC. OreCorp, together with Auramet is continuing discussions with several other financial institutions, including global Export Credit Agencies, as the company moves to secure syndicated debt funding for Nyanzaga.
Recent positive legislative changes in Tanzania have seen the royalty rate of 6% being reduced to 4% in certain circumstances. The company is further considering how it may take advantage of the reduced royalty rate to implement other arrangements that may complement, enhance or partially replace the debt financing. As regards such arrangements, initial discussions with credit funds, royalty and streaming providers have indicated strong interest in the Project.
The expressions of interest received by the company are indicative, non-binding and subject to completion of formal financing documentation, satisfactory due diligence and other standard debt financing terms, including satisfactory market conditions and relevant internal approvals.
“We are pleased with the strong interest we have received to date from banks with respect to financing the Project. The expressions of interest received give us further confidence in our ability to deliver on a comprehensive financing package for the Project which meets our objectives of prudently managing leverage and minimising dilution to the company’s existing shareholders. We intend to further advance discussions with banks and other capital providers to ensure we have maximum flexibility to secure financing for the Project in the prevailing market conditions,” Executive Chairman, Matthew Yates, said.
For further information please visit: https://www.orecorp.com.au/
