Newfield Resources Ltd (ASX:NWF) has unlocked committed capital to advance its plans for the Tongo Diamond Mine in Sierra Leone.
The company has entered into a $55 million equity funding facility with SBC Global Investment Fund, part of L1 Capital Global Opportunities Master Fund.
This funding stream allows Newfield to access the equity capital over 36 months to fund ongoing expansion of the mine.
In addition, the company will issue an initial placement of 1,453,488 shares to the investor at an issue price of $0.344, raising $500,000 before costs upon signing the facility agreement.
Towards commercial production
NWF's board has welcomed the new funding initiative, which will provide access to both working and expansion capital over the next three years.
The funding facility will allow flexibility on the timing of any placement to raise capital, but will not oblige Newfield to proceed with any placement.
Executive director Karl Smithson said: “We are very pleased to have the support of a high-quality, independent global investment group. This partnership enables Newfield to expedite the development of its Tongo diamond mine and advance the project into commercial production.”
First production sale
The flagship Tongo Diamond Project entered production earlier this year with carats mined from underground and surface locations contributing to the first production sale of more than 5,000 carats in Antwerp in May 2022, at a sales price of US$262 per carat.
This funding facility will contribute to the continued development and mining activities to advance the Kundu and Lando declines and to the opening of additional mining and production areas from the Kundu Kimberlite and the commencing of production from the Lando Kimberlite.
Work on conversion of ore body
The company will also deploy a portion of these funds to conduct work on the nearby Tongo Dyke-1 ore body which is aimed at converting the upper 100 metres of the declared JORC-compliant indicated and inferred mineral resource of 1.4 million carats – at a more than 1.0mm cut off size and a cut-off grade of 1.6 carats per tonne – to a mineral reserve estimate.
This work will include drilling for geotechnical and hydrology studies, detailed mine design, mine scheduling and engineering studies, as well as locating an appropriate site for a box cut and portal entrance for the planned decline which will afford access to the Tongo Dyke-1 ore body at depth.
This work is an important step toward fulfilling Newfield’s strategy of expanding and increasing production of the Tongo Mine by bringing additional kimberlites and flexibility into the existing life-of-mine plan.
The objective of this work is to enhance and extend the life of mine and investigate ways to reduce the production and overall cost-per-carat across the mine.