Asante Gold Corporation has secured a $500 million Gold Forward Purchase Agreement with Fujairah Holdings LLC, a deal that will significantly enhance its operations at the Bibiani Gold Mine in Ghana's Western North Region. This agreement, brokered through Asante’s subsidiary, Asante Gold Bibiani Ltd., allows the company to tap into $100 million in revolving financing over a two-year period. Asante plans to use these funds to ramp up its mining operations and complete the construction of the sulphide treatment plant at Bibiani. Dave Anthony, the President and CEO of Asante, described the partnership as a game-changer for the company, enabling them to accelerate their activities at Bibiani and increase their gold production. Asante aims to raise its gold output to more than 15,000 ounces per month by mid-year, reflecting its ambitious growth targets for the upcoming period.
Under the terms of the Gold Forward Agreement, Asante will deliver refined gold to Fujairah Holdings in exchange for the upfront $500 million payment. The agreement specifies that Fujairah will make an initial deposit of $100 million, which will be repaid through gold deliveries of equal value, beginning in March 2025. These deliveries will be made at a 7% discount to the prevailing market price of gold. The remaining $400 million will be paid in installments, with gold deliveries structured similarly. This arrangement provides Asante with immediate access to liquidity, helping the company to expedite its mining expansion and infrastructure development. At the same time, it ensures that Fujairah receives a consistent flow of gold over the contract’s duration, creating a mutually beneficial partnership.
The proceeds from this agreement will primarily be used to speed up mining activities and complete the sulphide treatment plant at Bibiani. Asante's obligations under the deal are backed by a parent guarantee and a debenture against its assets. Furthermore, Fujairah Holdings has agreed to take a subordinated position in relation to Asante’s senior lenders and bondholders. The final details of this arrangement will be outlined in an intercreditor agreement, which will be part of a broader financing package announced by Asante in October 2024. This agreement represents a pivotal step for Asante Gold, providing it with the financial support needed to advance its operations at Bibiani while strengthening its position in the competitive gold mining industry.
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