West Wits Mining Ltd has inked a credit approval term sheet for a senior debt syndicated loan facility of up to ZAR 902.5 million (about US$50 million) subject to final loan documentation and conditions precedent.
The credit facility will be used to develop the Qala Shallows Gold Project in South Africa as the first phase of development for its greater Witwatersrand Basin Project.
The Witwatersrand Basin Project holds a gold resource of more than 5 million ounces of gold at 4.66 g/t in an area that has produced over 1.5 billion ounces of gold.
Strong foundation for development
“Securing this facility will provide the majority of funding for this exciting project on non-dilutive, cost-effective bank loan terms,” West Wits Mining chair Michael Quinert said.
“It is satisfying to see we have earned the support of two of the region's most respected lending institutions in Absa and the IDC.
“This facility provides the strongest foundation to now complete our funding requirements and move quickly to commence work on getting Qala Shallows into production.”
The Industrial Development Corporation of South Africa Limited (IDC) and major South African bank Absa Bank Limited will contribute about 55% of all project funding for Qala with the remaining 45% to be funded through equity and early revenues.
Key terms of the facility include:
- 36-month repayment schedule from completion of drawdown.
- Variable interest rate linked to the Johannesburg Interbank Average Rate or 'JIBAR'.
- The borrower is West Wits (MLI) Ltd, the South African subsidiary of WWI, supported by guarantee from those within the group.
- All mandatory hedging will be done through the purchase of put options ensuring 100% exposure to rising gold prices.