- Gold explorer Cardinal Resources (CDV) has had its debt facility with Sprott Private Resource Lending bought up by the government of Ghana
- The Ghana Infrastructure Investment Fund, an investment arm of the country’s government, has taken over the full debt from Sprott
- Before the purchase, Cardinal had made a $400,000 repayment to Sprott, meaning the balance of the debt facility is now roughly $34 million
- Moreover, the transfer of debt gives Cardinal access to an extra $4.5 million in funds that were previously restricted
- The transfer of the debt proves the Ghanaian government’s strong support for Cardinal’s Namdini Gold Project in the country
- Shares in Cardinal are trading 1.2 per cent higher this afternoon, currently worth 42 cents each
Gold explorer Cardinal Resources (CDV) has had its debt facility bought by Ghana Infrastructure Investment Fund (GIIF) from Sprott Private Resource Lending.
Before the transaction, Cardinal made a US$400,000 (roughly A$575,000) repayment to Sprott, meaning the balance of the debt facility is now US$23.8 million (roughly A$34.2 million).
GIIF is a government-owned investment vehicle in Ghana. With the transfer of the debt from Sprott to GIIF, Cardinal said it now has access to an extra US$3.1 million (roughly A$4.5 million) in funds from previously restricted cash.
As part of GIIF taking over the debt from Sprott, Cardinal said it has agreed to amend and restate the debt facility under Ghanaian law.
GIIF CEO Solomon Asamoah said this is a “very important transaction” for the government of Ghana given the potential of Cardinal’s flagship Namdini Gold Project in the country.
“As stated many times by our President, H.E. Nana Akufo Addo, we believe it is very important that there is increased paid participation in all sectors of the domestic economy by Ghanaians, including the mining sector,” Solomon explained.
“GIIF is looking to play an important role by supporting both feeder and spin‐off industries made possible by the increased economic activity and accompanying new infrastructure arising from the mining operation,” he said.
He added that the development of Cardinal’s large-scale gold mine is very important to Ghana as it will help bring in much-needed jobs to the Northern District region where it lies.
Cardinal CEO and Managing Director Archie Koimtsidis spoke highly of its new debtors.
“The company is very impressed with the GIIF organisation, especially the range of Ghanaian infrastructure projects that the organisation has managed to complete in such a short timeframe,” Archie said.
“Cardinal is confident that GIIF will be a valuable stakeholder in the development of its 5.1 Moz Gold Mine in the Upper East Region of Ghana, West Africa and we would also like to take this opportunity to thank the Sprott Lending team for the sale of the debt facility to GIIF,” he said.
Cardinal said the conditions of the debt facility are largely unchanged but are otherwise more favourable for the company.
For example, the Sprott arrangements had a maturity date of March 1 2021, but under GIIF, Cardinal now has a 24-month repayment term. The interest rate is unchanged.
Of course, while the change in debt ownership is unlikely to affect production timelines or operational work, shareholders seem pleased with the support Cardinal has garnered from the Ghana government.
Shares in Cardinal are trading 1.2 per cent higher in early afternoon trade, currently worth 42 cents each.