Emerald Resources (ASX:EMR) has signed a mandate with Sprott Resource Lending and Macquarie Bank for a US$200 million ($281 million) corporate acquisition facility, scalable to US$400 million ($561.74 million).
The facility supports the company’s strategy to become a 600,000- to 800,0000-ounce-per-annum gold producer through potential acquisitions of global gold projects.
The funding is available for acquiring assets or companies holding such assets and advancing future projects to production decisions.
This builds on Emerald’s continuing partnership with Sprott after they collaborated in 2019 for the Okvau Gold Mine — for which Sprott was the sole financier — which has produced over 520,000 ounces of gold. Macquarie has a 20-year relationship with Emerald management, funding numerous projects.
The facility includes a US$200 million senior secured corporate acquisition facility with an uncommitted accordion option of up to an additional US$200 million, subject to lender approval. The five-year term provides funds available for drawdown over a 36-month availability period.
Interest rates are based on a competitive margin plus term SOFR (secured overnight financing rate), together with customary commitment and establishment fees.
The facility remains subject to customary conditions precedent, including completion of legal due diligence and definitive facility documentation.
Managing Director Morgan Hart says the company is entering an ‘exciting’ stage in its growth story as it embarks on two new developments in Australia and Cambodia over the next two years.
“We are extremely pleased to announce the signing of the Mandate with Sprott and Macquarie, two high ranking and well-respected financiers, to continue working with us on future projects,” Hart says.
“The backing of both Sprott and Macquarie with this corporate acquisition facility should tell the market that whilst Emerald is committed to delivering the Dingo Range and Memot gold projects into production, we are still hungry for growth and open for business.”
Sprott Senior Managing Partner Greg Caione says the company is ‘pleased’ to continue its partnership with Emerald, which began when it first supported the development of Okvau.
“Emerald has built and operated Okvau to a high standard, and our experience gives us confidence in this management team and in its ability to replicate that track record of success as the company continues to grow,” Caione says.
Macquarie Executive Director Abe Anand says the facility has been specifically structured to provide flexible acquisition funding, positioning the company to move quickly on strategic opportunities.
“Emerald has demonstrated a strong track record of project development, operational delivery, and disciplined capital management,” Anand says.
Emerald has cash and cash equivalents of circa $500 million to fund development and construction of both the 100% owned Dingo Range Gold Project in Western Australia and Memot Gold Project in Cambodia.
The company has ordered two 8,000-kilowatt Metso SAG mills and a crushing circuit for Dingo Range at a total cost of circa $30 million.
Development of both the Dingo Range and Memot projects are fully funded from existing cash reserves, with the acquisition facility specifically designed for potential new acquisitions and associated costs.
Emerald Resources is a sustainable gold explorer and mining company, with projects in Cambodia and Australia.
Write to Paula Fabe at Mining.com.au
Images: Emerald Resources
