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- Besra Gold (BEZ) signs a non-binding term sheet for the provision of up to US$300 million (A$448 million) in funding from major shareholder Quantum Metal Recovery
- The company believes the gold pre-purchase drawdown and offtake deal could mark “one of the largest deals of its kind signed by an ASX-listed junior”
- The deal potentially allows Besra to fully fund production at its three-million-ounce Bau gold project in Malaysia
- Besra Gold will now focus on a Bau feasibility study, accelerating production plans and upgrading the project’s JORC resource
- Shares in BEZ are soaring, up 60 per cent and trading at 6.4 cents at 2:26 pm AEDT
Besra Gold (BEZ) has potentially secured US$300 million (A$448 million) in funding through a non-binding term sheet with major shareholder Quantum Metal Recovery.
The company said upon completion, the gold pre-purchase drawdown and offtake deal could mark “one of the largest deals of its kind signed by an ASX-listed junior”.
The deal potentially allows Besra to fully fund production at its three-million-ounce Bau gold project in Malaysia’s east.
“This funding would completely alter Besra’s trajectory and provides a clear pathway to gold production at the Bau project,” Besra Chairwoman Jocelyn Bennett said.
“At a time when access to capital for emerging gold producers is difficult and typically highly dilutive, the board is very pleased to have removed this impediment to Besra’s growth.
“We now have a clear line of sight on commencing production at Bau, with our issued capital intact, as well as recourse to little, if any, debt and the restrictive covenants typically required by lenders.”
Ms Bennett confirmed the company was focused on updating its 2013 feasibility study, accelerating production plans and upgrading the Bau JORC resource.
Quantum Executive Chairman Dato Lim Khong Soon said the company was “excited” by the potential of the project.
“We are most pleased to have entered into the agreement with Besra and play a part in continuing the long tradition of gold mining in the Bau region, which goes back just over 200 years,” he said.
Through this agreement, Besra will have access to up to $10 million per month to use in the construction, commissioning and operation of the Bau site and associated infrastructure.
The facility will be settled through the delivery of up to three million ounces of gold to Qunatum at an agreed floating gold reference price, subject to a floor price.
Quantum is considered one of the largest gold distributors in Malaysia.
Besra said the facility would remove the company’s need for dilutive equity financing for project development, which it said could often negatively impact the market’s valuation of companies entering the project development stage.
The transaction is expected to be completed in the 2nd quarter of this calendar year.
Shares in BEZ were soaring, up 60 per cent and trading at 6.4 cents at 2:26 pm AEDT.
