Perseus takes corporate debt route to fund Yaoure Gold Mine project

Perseus Mining has accepted an offer from three banks for a $150 million corporate debt facility. The revolving credit (RCF), which matures in December 2023, will be used to fund development of its $265 million Yaoure Gold Mine project in Cote d’Ivoire. Subject to meeting conditions precedent, first drawdown on the debt is due no later than 30 June 2019.

Macquarie Bank, Nedbank and Societe Generale are providing the RCF which is priced at 425bp over six-month Libor. The margin rises and falls in line with the borrower’s leverage ratio. Gresham Partners provided borrower counsel.

The exploitation license for the project is expected to be granted in the near future (the license was due for deliberation by the Ivorian Cabinet on 10 April 2019, but time constraints prevented the hearing from going ahead). Full scale development is scheduled to start in late April, with first gold due by December 2020.

According to Jeff Quartermaine, managing director and CEO of Perseus Mining, “the decision to take the corporate financing route rather than project financing was a result of the extra flexibility that comes with setting up a revolving credit (RCF) with a parent company”: Perseus acquired Amara Mining in 2016 with the specific purpose of developing the Yaoure project.  

On top of the RCF, the project will be funded via $80 million of cash and bullion (available if required), along with additional contributions from future operational cash flows and proceeds from the exercise of warrants that expire this month.

There are currently no plans to refinance once the mine is producing, but Quartermaine does not rule this out as a future option.