Cora Gold (LON: CORA) shares are rising on Wednesday after the West African focused gold firm said it has signed a new $25m Mandate and Term Sheet with investment company Lionhead Capital Advisors Proprietary Limited.
The deal is to fund the future development of Cora’s flagship Sanankoro Gold Project in Southern Mali, but it is conditional on the completion of a Definitive Feasibility Study (DFS) before 2022. The new term sheet replaces the previous one with Lionhead, which was for $21m.
Minimum key objectives of the DFS include a 35% Internal rate of Return (IRR) based on a US$1,500/ oz gold price and 8 years mine life and production of 40,000 ounces per year.
After completing a positive DFS, there will be $12.5 million in equity financing and $12.5 million in convertible financing.
Bert Monro, CEO of Cora, said: “The updated Term Sheet with Lionhead is a fantastic demonstration of their support for Cora and importantly, further de-risks the Sanankoro Gold Project. With an increased focus on a CIL processing route to enable the development of a larger and longer life gold mine with better economics, there is an expectation of a larger capex than the January 2020 heap leach scoping study.
“In light of this, the increased equity and convertible commitment in this Term Sheet gives great support to the Company and significantly de-risks future project financing as we move towards an updated resource estimate and DFS completion.”
Cora’s share price is trading at 17.8p, up 1.73%, after earlier reaching a high of 19.25p.
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