PERSEUS Mining bolstered its balance sheet ahead of a decision on whether to proceed with the development of its Meyas gold project in northern Sudan.
The Sydney-listed gold producer said today it had upgraded a lending facility to a $300m revolving credit facility supplied by five banks, including South Africa’s Nedbank Corporate & Investment Bank, Absa Bank, and Rand Merchant Bank via parent FirstRand Bank.
Perseus previously had a $150m facility.
Including $405m in net cash as of December 31, the 500,000 ounce a year gold producer now has liquidity of about $705m. The RCF has a three year tenure.
Jeff Quartermaine, MD of Perseus said securing the upsized credit facility was despite disruption to the international lending markets following several high profile bank collapses. “This support is regarded as a major endorsement of the underlying quality of our assets and future cashflows,” he said.
The company would now be able to “strongly” press on with its growth strategy that includes organic and inorganic growth, he added. “In this regard, Perseus expects a final investment decision later this year in relation to the fully funded development of our Meyas Sand Gold Project in northern Sudan.”
In February last year, Perseus unveiled plans to dramatically expand its operational footprint with the A$230m purchase of shares in Orca Mining, a Toronto-listed gold exploration firm which has a gold project in Sudan.
The prospect has been scoped to produce 228,000 ounces of gold annually for the first seven years of a 13.5 life of mine. Proven and probable reserves of Block 14 stood at about 2.85 million oz at an assumed gold price of $1,350/oz.
Northern Sudan’s gold resources has attracted significant artisanal mining over the years, but it has not been formally developed. The country produces 100 tons of gold a year making it one of the largest in the continent.
Perseus is a company that has largely grown its production and resource base through merger and acquisition activity, but Quatermaine said it was as difficult as ever to secure new deals.
“The thing I would say is that from the outside, a lot of situations look very good because the people who are promoting them make sure that all of the good things are not in the market. What they don’t always share with the market is some of the things that are not so good,” he commented in October.
Shares in Perseus are about 7.5% higher year to date on the Australian Securities Exchange taking gains over the last year to 20%.
