Roxgold Inc. (TSX-V:ROG) is pleased to announce that it has signed a credit agreement with Societe Generale Corporate & Investment Banking and BNP Paribas with respect to its previously announced US$75 Million Senior Debt Facility. The Debt Facility will be used for the development of the Company’s Yaramoko Gold Project in Burkina Faso, West Africa. The terms of the Debt Facility are substantially the same as previously disclosed in the News Release dated February 11, 2015.
“The signing of the US$75 million Facility enables us to continue with our construction activities at Yaramoko, in line with our goal to reach production in the second quarter of 2016,” said John Dorward, President and CEO. “We thank our financing team, lawyers, consultants and bankers, who have demonstrated their support for the project over recent months and have worked diligently to finalize our financing agreement.”
The Debt Facility has a six-year term. Advances under the project finance facility will bear interest at a rate of LIBOR plus 4.75% pre-completion and 4.25% post completion. The US$15 million cost overrun account has been funded from equity through the proceeds of the November 4, 2014 public offering. Drawing under the Credit Agreement is subject to the satisfaction of certain customary conditions precedent, including the execution of the Hedging Program described below. The Debt Facility is supported by secured guarantees from the Company and each of its material subsidiaries.
In connection with the Debt Facility, Roxgold will establish a gold hedging program with the Banks. The gold hedging program covers the gold price exposure for 65,000 ounces of Yaramoko’s projected gold production, which equates to approximately 8.5% of the Company’s current reserve over the life of loan.
Roxgold is a gold exploration and development company with its key asset, the high grade Yaramoko Gold Project, located in the Houndé greenstone region of Burkina Faso, West Africa. The Company is currently advancing Yaramoko’s 55 Zone through construction and expects to commence production in the second quarter of 2016.
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