Resolute Mining Ltd said on Wednesday that it had signed a senior debt facility of up to $140 million to strengthen its liquidity and expand growth opportunities.
The Africa-focused gold miner said the facility would provide immediate access to up to $60 million in funding, with the potential to increase by a further $80 million through an accordion facility. The facility was arranged by the Sandton, South Africa-based lender Nedbank Group Ltd and the New York-based Citibank NA.
The three-year facility includes a $30 million revolving credit facility, a $30 million term loan facility with one-year drawdown period, a $80 million accordion facility and a credit margin of 5.3%, with no hedging requirements.
Resolute’s Syama phase 1 expansion in Mali, West Africa, and the company’s investments into extending the mine life at Mako in Senegal, West Africa are currently self-funded, so the facility is expected to remain undrawn until other growth projects have been identified.
At the end of June, Resolute’s net cash was $96.6 million. The new financing facility will increase liquidity to over $200.0 million, strengthening its balance sheet.
Chief Financial Officer Chris Eger said: ‘We are delighted to secure this $60 million loan facility and appreciate the confidence Nedbank and Citibank have shown in our business. This financing demonstrates the company’s ability to access commercial debt financing at competitive terms from international lenders. This loan facility provides us the flexibility to drive sustainable organic growth of the business as well as pursue inorganic growth opportunities.’
Shares in Resolute Mining fell 4.2% to 31.60 pence each in London on Wednesday morning.
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