One of Canada’s largest mining investors, Sprott, has agreed to provide a finance package to Québec-based but West Africa-focused gold miner Robex Resources (TSX-V:RBX).
Sprott Resource Lending received investment committee approval to provide Robex with a senior debt facility of up to US$105 million ($168.95 million), with the option to increase it to up to US$130 million.
The financier is a wholly owned subsidiary of Sprott and general partner of several funds whose investors include pension plans, retirement systems, insurance companies, foundations and endowments.
Since September 2010, Sprott has originated and managed more than 80 investments totalling more than C$3 billion ($3.33 billion).
The loan will be used to finance the construction of the Kiniero Gold Project in Guinea.
This comes close on the heels of a C$34 million capital raising that provides Robex with sufficient cash to advance construction, engineering and the procurement of long-lead items for the project.
Robex Managing Director Matthew Wilcox says Sprott Resource Lending completed comprehensive due diligence on the Kiniero Gold Project before securing investment committee approval.
“This debt facility will allow us to keep our target of Q4 2025 for first pour,” he says.
The senior secured debt facility will have a repayment moratorium of more than two years and final maturity in March 2030.
First drawdown of the facility, which attracts an interest rate of 6.5% per annum, is expected in the first quarter of 2025.
The loan also attracts an additional interest payment based on a gold price participation formula currently equivalent to about C$300 per ounce relative to the current consensus gold price forecast.
This applies to 3,600 ounces of gold produced each quarter for 15 quarters.
The debt facility, however, is not linked to any mandatory gold hedging or royalties requirements.
Robex, which has a market capitalisation of $C353.7 million, acquired the 470km² Kiniero Project in April 2022 via the tie-up with Sycamore Mining.
Kiniero currently hosts reserves of 1.41 million ounces of gold that will support a 9.5 year operation. The project, which is located in the gold-rich Siguiri Basin next to Predictive Discovery’s (ASX:PDI) 5.2-million-ounce Bankan deposit, produced 418,000 ounces between 2002 and 2014 before being placed on care and maintenance.
The mine is expected to produce an average of over 150,000 ounces of gold each year for the first six years.
A Definitive Feasibility Study estimates Kiniero will have a post-tax net present value of US$647 million and an internal rate of return of 61% at an assumed gold price of US$2,431 an ounce, which is expected to generate US$2.83 billion in revenue over the life of the mine.
Write to Angela East at Mining.com.au
Images: Robex Resources
