This follows the announcement by Avesoro Resources on 11 October 2017 of an updated mineral resource and mineral reserve estimate for the New Liberty gold mine and details of the new mine plan for New Liberty, which requires the procurement of this additional equipment.
Avesoro Resources had sought quotes for the heavy mining equipment from a number of providers, however, due to Mapa İnşaat ve Ticaret A.Ş.’s (Mapa) purchasing power it can secure more competitive terms than can be achieved by the company directly.
Mapa is part of the MNG group of companies owned by the company’s non-executive chairman, Mehmet Nazif Gűnal, and therefore, entering into the finance agreements constitutes a related party transaction for Avesoro Resources under the AIM Rules.
Once the expanded mining fleet is complete, Avesoro Resources expects to be able to ramp-up to a quarterly gold production rate of 36 koz during 2018.
Equipment to be purchased
The finance agreements totalling approximately US$6.1 million, relate to two Sandvik 1500i drill rigs, one Komatsu PC1250 excavator and four Komatsu HD785 haul trucks.
Delivery to New Liberty is expected to occur in late October 2017.
The loan principal of these agreements includes a mark-up of 2.5% over the cost incurred by Mapa in procuring the equipment.
Bea Mountain Mining Corporation (BMMC) expects to enter into further agreements with Mapa, on substantially similar terms to the finance agreements, to facilitate BMMC’s purchase of additional new heavy mining equipment including three Komatsu PC1250 excavators and eight Komatsu HD785 haul trucks along with some auxiliary equipment for delivery to New Liberty throughout Q4, 2017 and Q1, 2018, as required under the updated mine plan announced by the Company on 11 October 2017.
The equipment finance loans under each of the finance agreements are unsecured, with interest charged at 6.5% per annum on the US$ denominated loan amount of approximately US$3.7 million and 5.5% per annum on the Euro denominated loan amount of approximately €2.0 million (equivalent to approximately US$2.4 million).
The loans are repayable in cash in eight equal semi-annual instalments, the first of which will fall due six months after utilisation of the loan.
Feature image credit: Wikimedia