Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
VANCOUVER, BRITISH COLUMBIA–(Marketwired – Oct. 24, 2013) – Asanko Gold Inc. (“Asanko” or the “Company”) (TSX:AKG)(NYSE MKT:AKG) is pleased to announce it has entered into a Definitive Senior Facilities Agreement (the “Agreement”) with a special purpose vehicle of Red Kite Mine Finance Trust I (“Red Kite”) to provide a secured project debt facility for a total of $150 million (all figures United States dollars). The project debt facility will be used for the development, construction and working capital requirements of the Esaase Gold Project. There are no gold hedging provisions, cash sweep requirements or restrictions usually associated with traditional project finance facilities of this nature that prevent the Company from pursuing its growth strategy. Prior to the execution of the Agreement, Red Kite conducted substantial technical and legal due diligence and as such, the Agreement is not subject to further due diligence. The Company will be holding a conference call and webcast today at 10:00am Eastern Standard Time to discuss the financing, please refer to the details below.
The Agreement provides for two term loan facilities: a $130 million term loan facility (the “Project Facility”) and a $20 million cost overrun facility (the “Overrun facility”). The Overrun facility is provided as an option available to the Company, should it be required. Performance under the Agreement is fully secured by the assets of the Company’s current subsidiaries and guaranteed by the Company until project completion.
In addition to the Agreement, Asanko and Red Kite have also entered into an Offtake Agreement under which the Company has agreed to sell the gold from Esaase for the life of the mine to Red Kite at spot prices during a nine day quotational period following shipment.
Commenting on the announcement, Peter Breese, President and CEO, said, “I am delighted to announce that the Esaase Gold Project is now fully financed through construction and commissioning, including working capital. This will enable us to progress with the development of the project upon conclusion of the DFS, which is due later this quarter. Our intention is to start the Front End Engineering and Design program before year-end and construction in Q1 2014 to achieve our target of steady state production of 200,000 ounces per year by Q4 2015.
“The completion of this financing, after extensive due diligence, in the current market environment demonstrates the robustness and strength of the Esaase Gold Project as well as the confidence in the team that we have assembled to build and operate the mine. Importantly, this loan does not have the traditional hedging, cash sweeps and growth restrictions typically associated with project finance so we can also continue to pursue our vision of becoming a mid-tier gold mining company through acquisitive growth.”
1 As at September 30, 2013
Project Facility Details ($130 million):
Overrun Facility Details ($20 million):
Offtake Agreement Details:
Conference Call & Webcast Details
The Company will host a webcast and conference call at 10:00am Eastern Standard Time today, October 24, 2013. Presentation slides to accompany the call are available at www.asanko.com.
To access the conference call, please dial-in 10 minutes beforehand and quote “Asanko Gold”:
Canada Toll Free: 1-866-228-9189
US Toll Free: 1-877-941-2332
UK Toll Free: 0800-358-5263
International: 44-208-515-2334
A replay facility will be available two hours after the call on Asanko’s website: www.asanko.com or, until October 30, 2013, please dial using the access code: 4647156:
US Toll Free: 1-800-406-7325
Canada Toll: 1-303-590-3030
UK Toll Free: 0800-358-3474
International: 44-207-154-2833
To access the webcast, please click on the link or visit:
http://event.on24.com/r.htm?e=703900&s=1&k=2DF882380E4793DE581ACA0650BBE99F
About Asanko Gold Inc.
Asanko’s vision is to become a mid-tier gold mining company that maximizes value for all its stakeholders. Our immediate focus is on near term gold production at our fully financed, multi-million ounce Esaase Gold Project located in Ghana, West Africa. Asanko is managed by highly skilled and successful technical, operational and financial professionals. The Company is strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighbouring communities.
About RK Mine Finance
RK Mine Finance provides mining companies with project financing and metal off-take agreements for initiation or expansion of mine production and is part of the Red Kite group. Red Kite operates across the global metals industry from offices in Bermuda, Hong Kong, London, New York, Shanghai and Sydney. Investors in Red Kite funds include college endowments, foundations, family offices, pensions and other institutional investors.
