Ottawa, Canada — MININGREVIEW.COM — 18 August 2008 – Oreone Resources Incorporated – an emerging Canadianexplorer and intermediate gold producer – has been granted an increased loan of US$330 million (R2.45 billion) to finance its Essakane gold project in the West African state of Burkina Faso.
A company announcement here revealed that Bayerische Hypo- und Vereinsbank AG – a member of UniCredit Group – and The Standard Bank of South Africa had received final credit approvals to fully underwrite and provide US$300 million (R2.25 billion) in project debt and a US$30 million (R225 million) cost over-run facility for the project.
It pointed out that the US$330 million (R4.45 billion) combined facility was considerably larger than the US$250 million (R1.9 billion) originally envisioned, with each bank subscribing equally to the increase. The US$175 million (R1.3 billion) commercial tranche underwritten by HVB had a seven-year term, while the US$125 million (R937 million) Export Credit Insurance Corporation tranche underwritten by Standard Bank was over an eight-year term.
At current market rates, the overall annual interest rate for the combined facility, including political risk insurance premiums, was expected to be below 8%.
Orezone CEO Ron Little commented: “We are very pleased to have achieved another significant milestone in the ongoing development of the Essakane project. The combined facility has increased by over 30%, on reasonable terms during one of the most difficult credit market periods. This clearly demonstrates the robust nature of the project, and should attract attention to Orezone and Burkina Faso,” he added.
Essakane contains 4.0Moz of indicated resources and 1.3Moz of inferred resources at a 0.5g/t cut-off. Recoverable reserves contained within a US$600/oz gold price mine plan are 3.0Moz. Furthermore, the deposit remains essentially open and untested below 260m from surface, and is surrounded by several satellites deposits.