Caracal Gold PLC (LSE:GCAT) said it has arranged US$10.5mln of non-dilutive financing through a pre-paid gold purchase deal to expand production at its Kilimapesa mine in Kenya.
It said the agreement, if complete, will enable the Kilimapesa mine to be expanded to the targeted annual production rate of 24,000oz of gold, which is now scheduled in March 2023.
A pre-paid gold sale has been agreed through its wholly owned Kilimapesa Gold Pty Ltd (KPG) subsidiary with OCIM Metals & Mining Sa, a Paris-based trading firm.
Kilimapesa will be paid in two tranches, with the first of US$7mln to be drawn on or before the end of next month and the second of US$3.5mln to be drawn down on terms to be agreed between OCIM and KPG.
Caracal chief executive Robbie McCrae said securing non-dilutive financing is “a great outcome” for the company, the project and all stakeholders and that OCIM being a funding partner “is a vote of confidence”.
He said the regional exploration efforts in Kenya were continuing to “build the life of mine and value potential”, while alongside Kilimapesa, the company is “excited by the development opportunity Nyakafuru offers and look forward to progressing our targeted exploration programme to support a Preliminary Economic Assessment”.