Cora Gold (LSE:CORA) has signed a binding term sheet for a US$120 million ($167.3 million) gold stream with Eagle Eye Asset Holdings to support the development of the Sanankoro Gold Project in southern Mali.
As part of the deal, Eagle Eye gains interest in around 228.45 million shares, representing 29.9% of Cora Gold. Eagle Eye is also entitled to purchase 30.44% of gold produced at the project, at a price equal to 20% of the prevailing gold spot price.
At the time of writing, gold sat at US$4,800 an ounce, on track for a fourth consecutive weekly advance, as prospects for a permanent ceasefire agreement between the US and Iran eased concerns over inflation and central bank hikes, as reported by Trading Economics.
The agreement removes future funding requirements for the project, enabling Cora Gold to move forward with pre-production workstreams with confidence.
Combined with existing equity funding following a recent £15.7 million capital raise, the stream fully funds Sanankoro to production, subject to permitting.
Cora Gold retains the right to replace 50% of stream with a traditional senior debt facility for up to 240 days following approvals, enabling the company to optimise the financing structure.
Set for gold
CEO Bert Monro says the gold stream is a milestone for the company, de-risking Sanankoro, providing a fully funded development project alongside its existing equity.
“Importantly, the flexibility within the stream structure allows us to optimise the financing package through the introduction of traditional debt, while retaining the stream as a committed fully funded construction solution,” Monro says.
“We remain highly encouraged by the broader resource and greenfield upside across the project area and will continue to pursue a dual-track strategy of advancing development while systematically growing the resource base to support long-term production.”
The Sanankoro Project is expected to produce 64,000 ounces of gold per year in the initial five years and 482,000 ounces over the entire mine life.
A 2025 Definitive Feasibility Study, based on a US$2,750 an ounce gold price, outlines the project to have an initial development capex of US$124 million at an all-in sustaining cost of US$1,478 an ounce driven by low-strip ratios, soft ore and simple processing.
The project has a net present value of US$221 million and post-tax internal rate of return of 65%.
Cora Gold owns a portfolio of prospective gold assets within Mali and Senegal.
Write to Aaliyah Rogan at Mining.com.au
Images: Cora Gold
