Orezone says it has has secured binding commitments totalling in excess of US$182 million to fully finance the construction of its shovel-ready Bomboré Gold Project (“Bomboré” or the “Project”) located in Burkina Faso, West Africa (“Project Financing Package”). The Project remains on track for first gold pour by Q3-2022.
The Project Financing Package is comprised of the following key terms:
- US$96 million senior secured debt facility with Coris Bank International (“Coris Bank”) with interest rates of 8.0% and 9.0% (“Senior Debt Facility”).
- Coris Bank is one of the largest and fastest growing banks in West Africa.
- US$35 million 8.5% convertible note with Resource Capital Fund VII L.P. (“RCF”) and Beedie Investments Ltd. (“Beedie Capital”) (“Convertible Note Facility”).
- RCF VII is part of Resource Capital Funds, a global mining private equity firm.
- Beedie Capital is the private investment arm of Beedie, the largest private industrial owner, developer, and property manager in Western Canada.
- US$51 million bought-deal equity offering of 61,950,000 common shares of the Company (the “Common Shares”) at a price of C$1.05 per Common Share (the “Equity Offering Price”) for gross proceeds of C$65,047,500 co-led by Canaccord Genuity Corp. (“Canaccord”) and CIBC Capital Markets (“CIBC”) (the “Equity Offering”).
- No gold hedging, offtakes, or cost overrun reserve required by the debt facilities.
- Debt covenants allow for expansion flexibility of oxides and sulphides.
- The Project remains free of gold streams and private royalties, thereby preserving upside for shareholders.
Patrick Downey, President and CEO stated, “We are extremely pleased to announce this attractive financing package following a competitive selection process. We believe the financing package announced today is a testament to the strong project fundamentals offered by Bomboré.
We are delighted to welcome Coris as the senior lender to the Project and proud to have them as a partner. They are one of the largest West African banks and first became a shareholder in 2018. They have financed mining projects within West Africa and are very conversant with the technical and political landscape in the region.
We have worked very closely with RCF throughout this process and thank them for their continued support. We are also very pleased to welcome the Beedie Group as a new lender to the Company.
The debt package is structured to provide maximum flexibility for the Company to complete future expansions including the staged Phase II Sulphide Expansion. Bomboré hosts a very large M&I resource at shallow depths, has exciting exploration potential, and is open to further enhancement opportunities. We are now ready to ramp up construction activities at Bomboré with first gold pour scheduled for Q3-2022.”
The Project Financing Package was the result of a competitive process conducted with the Company’s financial advisor, Cutfield Freeman & Co Ltd. The Senior Debt Facility with Coris Bank together with the Convertible Note Facility with RCF and Beedie Capital were selected as they provided the best combination of operational flexibility and pricing for the Company.
The Company has received a credit-approved binding term sheet from Coris Bank International for a senior secured project-level debt facility that is divided into a Medium-term Loan and a Short-term Loan. The Medium-term Loan will fund construction costs while the Short-term Loan will fund the remaining capital spend and initial working capital at a lower interest rate.
Both loans are denominated in West African Communauté Financière Africaine francs (“XOF”), the official currency of Burkina Faso. The US dollar equivalents are shown using an exchange rate of 545 XOF per USD. As a portion of the project capital will be spent in XOF, the Senior Debt Facility in XOF will provide a natural currency hedge during construction.