Euronext-listed Akobo Minerals has agreed with Monetary Metals on revised terms for the company’s existing gold loan facility. 

Monetary Metals initially provided funding in November 2022 to support development of Akobo’s Segele gold project, in Ethiopia, and has remained a committed partner throughout.

A first amendment was completed in February 2024. Following continued operational progress and updated development plans, the parties have now signed a memorandum of understanding (MoU) outlining revised terms intended to provide Akobo with greater financial flexibility. 

The revised MoU specifies that the interest rate on the outstanding loan will be reduced to the original 22% a year, with payment-in-kind (PIK) provisions for a 90-day period with no cash interest payments.

The revisions also include an interest-free grace period of 180 days.

The first repayment is now scheduled to begin in early 2026, with the loan maturity extended to June 30, 2027.

Further, a standstill agreement is in place until August 31, during which no default or enforcement actions will be taken.

The main closing conditions to be fulfilled by August 31 include finalisation and approval of an updated mine plan and economic model, as well as minimum new funding of $3.5-million, through equity, debt or other instruments, including convertible structures at Akobo’s discretion.

The closing conditions also include approval of the revised loan terms by Monetary Metals’ bondholders, which have already been obtained, along with the signing of a definitive second restructuring agreement.

Additional terms include the issuance of new warrants to Monetary Metals, increasing their entitlement from 2% to 3% of Akobo’s fully diluted market capitalisation. Monetary Metals will also maintain a board observer seat until the loan is fully repaid.

Akobo said on May 13 that the revised agreement was part of its broader strategy to secure a long-term financial foundation.

Operationally, the Segele processing plant is active and gold production has started. Moreover, geological data supports the presence of high-grade mineralisation.

Sutton Global has been engaged to oversee the next phase of development, with a focus on enhancing underground access and production efficiency through the vertical shaft project. 

“We appreciate the continued support from Monetary Metals and their confidence in our long-term plans. With the right partners, a strong operational team and the project fundamentals in place, we are focused on putting the final pieces together to unlock the full value of Segele,” Akobo CEO Jørgen Evjen said.