TIDMCORA
RNS Number : 0391L
Cora Gold Limited
08 September 2021
Cora Gold Limited / EPIC: CORA.L / Market: AIM / Sector:
Mining
08 September 2021
Cora Gold Limited ('Cora' or 'the Company')
US$25m Term Sheet for the Construction of Sanankoro Gold
Project, Mali
Cora Gold Limited, the West African focused gold company, is
pleased to announce that it has signed a new US$25m Mandate and
Term Sheet (the "Term Sheet") with investment firm, Lionhead
Capital Advisors Proprietary Limited ('Lionhead'), to fund the
future development of Cora's flagship Sanankoro Gold Project
('Sanankoro' or 'the Project') in Southern Mali (the 'Project
Financing'). This is conditional on, among other matters, the
completion of a Definitive Feasibility Study ('DFS') on the Project
before the end of June 2022. This new Term Sheet replaces the
previous one with Lionhead, which was announced on 18 June 2020 and
was for US$21m.
Highlights
-- US$25m Term Sheet to finance the development of Sanankoro on completion of a positive DFS
-- US$12.5m Equity Financing
-- US$12.5m Convertible Financing
-- Term Sheet requires Cora to deliver a DFS before the end of
H1 2022 with minimum key objectives (together the 'Project
Milestone') including:
-- 35% Internal rate of Return ('IRR') based on a US$1,500/ oz gold price; and
-- 8 years mine life and production of 40,000 ozs/year, or
equivalent production over a different time period and delivering
the minimum IRR threshold, in a US$1,700/oz gold price pit
shell
-- Updated Mineral Resources Estimate on target for Q4 2021 and
completed DFS targeted for H1 2022
-- Lionhead prepared to syndicate +30% of the Term Sheet on the same terms with other investors
Bert Monro, CEO of Cora, commented, "The updated Term Sheet with
Lionhead is a fantastic demonstration of their support for Cora and
importantly, further de-risks the Sanankoro Gold Project. With an
increased focus on a CIL processing route to enable the development
of a larger and longer life gold mine with better economics, there
is an expectation of a larger capex than the January 2020 heap
leach scoping study. In light of this, the increased equity and
convertible commitment in this Term Sheet gives great support to
the Company and significantly de-risks future project financing as
we move towards an updated resource estimate and DFS
completion."
Term Sheet Details:
Lionhead is acting as lead investor and arranger on behalf of a
consortium of investors including the founders of LionOre Mining
International Ltd (which was bought by Norilsk Nickel for US$6.3bn
in 2007), as well as the initial investors in Mantra Resources
Limited (which was bought by ROSATOM for AUD$1.2bn in 2010). Paul
Quirk, a non-executive director of Cora, is a founding partner and
director of Lionhead. The Quirk Family are potential beneficiaries
of trusts that own 34.55% of Cora through Brookstone Business Inc
and Key Ventures Holding Ltd.
The Term Sheet envisages:
-- Equity Financing: US$12.5m subscription for new ordinary
shares of no par value each in Cora at the lower of (i) an 10%
discount to the 30-day volume weighted average price ('VWAP') at
the date that Cora announces achievement of the Project Milestone
and (ii) the lowest price at which Cora has issued new ordinary
shares in the 60 days prior to the date that Cora announces
achievement of the Project Milestone (the 'Equity Financing')
-- Convertible Financing: US$12.5m investment in a Convertible Loan Note:
-- Coupon: 8% per annum.
-- Conversion: The total amount outstanding under the
Convertible Loan Note (including interest) shall be converted, at
the election of Lionhead at any time prior to the 5th anniversary
of the issue of the Convertible Loan Note, into ordinary shares in
Cora at the lower of (i) a 30% premium to the 30-day VWAP at the
time of the Equity Financing or (ii) the 30-day VWAP at the time of
conversion.
-- Net Smelter Return Royalty ('NSR'): 1% until 250,000 ozs of
gold have been produced from the Project. Cora may purchase and
terminate the NSR at any time for US$3m payment.
-- Repayment: Repayable on the fifth anniversary of advance date
if not converted, or earlier, at the option of the holder, in the
case of: (i) a change of control of Cora; or (ii) the merger or
sale of Cora (including the sale of substantially all of the assets
of the Company) at a 30% premium to the total amount outstanding
under the Convertible Loan Note.
Lionhead acknowledges that Cora intends to undertake private
placements to enable existing shareholders to subscribe +US$3.75m
in the Equity Financing and +US$3.75m in the Convertible Financing
such that Lionhead's participation in the Project Financing may be
reduced by such amounts.
A fee equal to 3% on up to US$25 million Project Financing shall
be paid by the Company to Lionhead on receipt of the proceeds in
respect of the Equity Financing and Convertible Financing by
Lionhead.
Related Party Transaction
The entry into the Term Sheet is deemed to constitute a related
party transaction for the purposes of Rule 13 of the AIM Rules for
Companies. Cora's independent directors for this purpose (being all
those save for Paul Quirk) consider, having consulted with the
Company's nominated adviser, that the terms of the Term Sheet are
fair and reasonable insofar as the Company's shareholders are
concerned.
Further Details
The Company is developing the Sanankoro Gold Project in Southern
Mali where SRK has a target of between 1-2Moz gold to a vertical
depth of 100m and an initial Scoping Study on the Project has
indicated a 107% IRR and Annual Free Cash Flow of US$24m at a gold
price of US$1,500/oz.
The Company is now focused on resource growth and upgrading of
existing Inferred resources to Measured & Indicated at the
Project ahead of developing a standalone mine. To this end, it is
undertaking a +35,000m drilling programme, which is its largest
single drill programme ever undertaken and is expected for
completion in September 2021. Top drill results from the 2021
programme include:
49m @ 15.55 g/t incl 8m @ 89.12
g/t
19m @ 31.56 g/t incl 6m @ 95 g/t
--------------------
2m @ 146.43 g/
--------------------
32m @ 7.83 g/t incl 4m @ 53.86
g/t
--------------------
32m @ 6.92g/t
--------------------
56m @ 3.54 g/t incl 21m @ 8.17
g/t
--------------------
8m @ 19.11 g/t
--------------------
32m @ 4.43 g/t
--------------------
21m @ 5.75 g/t
--------------------
14m @ 8.54 g/t
--------------------
54m @ 2.07 g/t incl 2m @ 17.71g/t
--------------------
66m @ 1.58g/t
--------------------
Market Abuse Regulation ('MAR') Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014, which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018, until the release of this
announcement.
** ENDS **
For further information, please visit http://www.coragold.com or
contact:
+44 (0) 20 3239
Bert Monro / Norm Bailie Cora Gold Limited 0010
Christopher Raggett / finnCap Ltd +44 (0) 20 7220
Charlie Beeson (Nomad & Joint Broker) 0500
------------------------- ----------------
Andy Thacker / James Turner Pope Investments +44 (0) 20 3657
Pope (Joint Broker) 0050
------------------------- ----------------
Susie Geliher / Selina St Brides Partners +44 (0) 20 7236
Lovell (Financial PR) 1177
------------------------- ----------------
Notes
Cora is a gold company focused on two world class gold regions
in Mali and Senegal in West Africa. Historical exploration has
resulted in the highly prospective Sanankoro Gold Discovery, in
addition to multiple, high potential, drill ready gold targets
within its broader portfolio. Cora's primary focus is on further
developing Sanankoro in the Yanfolila Gold Belt (Southern Mali),
which Cora believes has the potential for a standalone mine
development. Cora's highly experienced management team has a proven
track record in making multi-million-ounce gold discoveries, which
have been developed into operating mines.
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