The revised and improved terms of the facilities, in exchange for the provision of a personal guarantee from Mehmet Nazif Gűnal, non-executive chairman of Avesoro Resources, and corporate guarantees from the Avesoro Holdings group, the beneficial owner of 73.5% of the company’s issued equity are detailed as such:
- Rescheduled repayment structure agreed with no further capital repayments due until 31 March 2018, allowing the company to generate a prudent level of cash reserves before repayments commence, with the repayments scheduled to reflect the current life of mine production profile of the New Liberty gold mine in Liberia;
- Senior facility loan tenor extended by two years until 31 January 2022, whilst the tenor on the subordinated facility has been extended to the earlier of 12 months following the repayment of the senior facility or 31 January 2023;
- The senior facility interest rate remains at US$ LIBOR plus 1.8% until 2020, following which it will increase to LIBOR plus 4.3% and the subordinated facility interest rate remains the same at LIBOR plus 7.5%;
- Removal of the cash sweep mechanism that obliged the company to use surplus cash generated by New Liberty gold mine to accelerate loan repayments, thereby allowing surplus cash generated to be spent on value enhancing activities including project expansion and exploration; and
- Removal of many of the financial covenants and distribution tests, increasing operating flexibility and reducing the company’s administrative burden and monitoring costs associated with the facilities.
“The new, improved terms of the facilities and revised repayment schedule will provide the company with financial stability as we continue to build on the substantial operational improvements we have made at New Liberty gold mine. We remain committed to delivering real and sustained value to our shareholders, and now look forward to using New Liberty as a platform for our growth strategy,” says Serhan Umurhan, CEO of Avesoro Resources.
Feature image credit: Avesoro Resources
(Avesoro Resources’ New Liberty gold mine in Liberia)