Gold Mining signed an engagement letter giving Barclays Bank and Société Générale Corporate & Investment Banking an exclusive mandate to act as lead arrangers for bank debt financing for the Karma Gold Project in Burkina Faso, West Africa.
The letter sets forth the steps under which the mandated banks are appointed to arrange a senior loan for the Karma Project of up to $90 million. Steps include agreement on final terms, conditions and requisite documentation for the senior debt facility, completion of due diligence and procurement of credit approvals.
True Gold’s financing strategy is based on a combination of the senior debt facility, equipment financing, equity and off-take partner contributions. The company is pursuing all financing options concurrently, providing maximum flexibility for True Gold to reach its debt financing target and obtain all capital required to develop the Karma Project.
“The engagement letter with Barclays and SGCIB, two leading international investment banks with proven financial capabilities, represents another important step towards developing the Karma Project,” said Mark O’Dea, executive chairman, True Gold. “We believe that the Karma Project’s low costs, rapid payback period, low technical risks and solid economics make it a superior candidate for financing from the international banking community.”
“From the beginning, our mine development and operations team have designed the Karma Project to maximize profitability, generate strong early cash-flow, minimize technical risk and manage both capital and operating costs,” added Dwayne Melrose, president and CEO, True Gold. “By moving forward with Barclays and SGCIB now, we ensure that financing keeps pace with ongoing advancements at the Karma Project in key areas such as detailed engineering and design, the construction of mine-related facilities such as the barrage, and permitting.”
True Gold Mining is a worldwide gold exploration, development, operations and production company.