Toubani Resources (ASX:TRE) has received a non-binding and non-exclusive commitment letter for Africa Minerals and Metals Processing Platform (A2MP) to provide a minimum US$160 million ($250 million) debt facility.
Upon settlement of the strategic investment and debt facility, A2MP will appoint Gaurav Gupta to Toubani’s board who is expected to take an active role in supporting the Kobada Gold Project financing, equity, and stakeholder engagement workstreams ahead of a final investment decision (FID), targeted for this calendar year.
Toubani, which has a market capitalisation of $60.67 million, has also raised $29 million through a two-tranche placement of about 120.8 million shares at an issue price of $0.24 per new share. Funds raised are to be deployed to readying Kobada for development and pursuing resource growth ahead of FID.
Sternship Advisers acted as financial advisor with respect to the strategic partnership with A2MP. Sternship and Canaccord Genuity (Australia) are acting as joint lead managers and bookrunners to the placement. Wallabi Group is co-lead manager to the placement.
Separately, Toubani directors intend to subscribe for an additional 1.2 million new shares and about 1.2 million options on the same terms as the placement for an aggregate amount of $290,000, subject to shareholder approval.
Toubani has entered into a subscription agreement with Africa Minerals and Metals Processing Platform in which A2MP has agreed to subscribe for $15.2 million under tranche two, comprising some 63.2 million new shares and about 63.2 million options, representing an 18% shareholding in Toubani.
As part of A2MP’s debt commitment letter, Toubani has agreed to issue 15 million free unlisted options to A2MP, subject to shareholder approval at a forthcoming EGM. The options will be exercisable at $0.336, representing a 40% premium to the offer price.
Toubani has also agreed to issue 12.5 million free unlisted options to A2MP, subject to settlement of the strategic investment, shareholder approval for the issue of the debt drawdown options at the July EGM and the debt drawdown options being exercisable following Toubani’s execution of and first drawdown on a minimum US$160 million debt facility.
Settlement of tranche one of the new shares and options is expected on 6 May 2025.
Toubani Managing Director Phil Russo says the oxide-dominant Kobada Project is a “company-defining project” and one in which A2MP shares the company’s vision of its “significant potential”.
“A2MP, supported by Afreximbank, has demonstrated expertise in funding and developing assets across Africa, and with their support we are well-positioned to advance Kobada towards a final investment decision,” Russo says.
“This strategic partnership adds EEA’s (Eagle Eye Asset Holdings) and Afreximbank’s strong track record of project execution and development in Africa with Toubani’s technical capabilities, aligning perfectly with our goal of unlocking value from our premier Kobada oxide gold project.”
Eagle Eye Asset is the controlling shareholder of A2MP and is a single-family office based in Singapore. EEA aims to build and develop an extensive investment portfolio in the mining, clean energy, infrastructure, e-mobility, and logistic sectors.
A2MP is a “pioneering strategic platform dedicated to unlocking the vast potential to transform and process Africa’s minerals and metals” with support from the African Export-Import Bank (Afreximbank), whose balance sheet exceeds $40 billion and has a panAfrican mandate to play a critical role in enabling the development and scaling of the platform across the continent.
A2MP Director Gaurav Gupta says the firm remains confident about the future development prospects of the Kobada Gold Project in Mali.
“Our vision with this investment is to assist Toubani’s existing team in realising value for Kobada, leveraging our extensive in-country network and relationships with African debt and equity financiers,” Gupta says.
Key upcoming milestones for Toubani include finalising investment agreements with Mali, and completing key ESIA and permitting activities, which the CEO notes remain on track.
Toubani is also set to begin a pre-engineering workstream that will serve to de-risk the project’s execution. In parallel, Toubani will start a targeted diamond drilling program to test the Kobada resource at depth where the average drill depth remains shallow.
Proceeds from the placement, in conjunction with Toubani’s existing cash, will be allocated towards advancing Kobada to FID and pursuing resource growth, among other activities.
Toubani is tackling the development of its Kobada Gold Project from every angle, employing an approach aimed at moving it towards production in the near term while also shoring up its long-term viability, as reported by Mining.com.au.
The focus for the junior explorer in 2025 is to advance the 2.2-million-ounce project to FID in H2 2025 to place it firmly on the path to production in 2026. Permitting improvements in Mali are allowing Toubani to enact the “de-risk” component of its strategy, with an investment framework having now been finalised with the Mali Government.
Write to Adam Orlando at Mining.com.au
Images: Toubani
