TSXV-listed mineral exploration company Thor Explorations has signed an engineering, procurement and construction contract with Norinco International for its 100% owned Segilola gold project in Nigeria.
The engineering, procurement and construction (EPC) contract was signed on 31 May during the 10th International Infrastructure Investment and Construction Forum in Macao, China.
The EPC contract has been agreed on a lump sum turnkey (LSTK) basis which provides Thor with a fixed price of US$67.5 million for the full delivery of design, engineering, procurement, construction and commissioning of the proposed 650 000 tpa gold ore processing plant within 18 months of the commencement date and includes guarantees for construction schedule and plant performance.
Commencement of the EPC contract is subject to certain conditions precedent, including financial close of the $78 million Africa Finance Corporation (AFC) financing announced in April 2018. In this regard, Thor Explorations has now received AFC board approval for the AFC financing. Thor and AFC are now in the process of documenting the financing.
The $67.5 million EPC contract price compares directly to the$65.9 million total contract value stated in the company’s independent NI 43-101 dated 18 March 2019. The price difference is attributable to improvements in milling and leach circuits, power plant and augmentation of the project construction team.
As announced on 16 April 2018, Norinco International has also committed to provide $6.5 million in financing of the EPC contract. As a result of the AFC and Norinco International financings and indicative terms provided by project’s consumables supplier for a $1.9 million working capital arrangement, the Segilola project is now 89% funded ($86.4 million of a total project funding requirement of $97.6 million).
Almost fully funded
On 30 April 2019, Thor commenced a private placement for the total of $15 million. The private placement is progressing well, and its successful conclusion will result in the project being fully funded through construction into operation.
"We are delighted to have reached another important milestone at the Segilola gold project, says Thor Explorations President & CEO Segun Lawson.
“This is a key contract that fixes the majority of the project cost, guaranteeing both construction time and plant performance, materially de-risking the delivery of the project,” Lawson concludes.