Gold producer Asante Gold has secured $470-million in credit and equity commitments, laying the foundation for a financing package that will fund its growth ambitions and recapitalise its balance sheet.

The commitments include a $175-million package from private funds advised by Appian Capital Advisory and a $170-million credit and underwrite commitment from Rand Merchant Bank (RMB), a division of FirstRand Bank. The financing also supports the elimination of short-term liabilities, including those owed to Kinross, and underpins plans to ramp up production to more than 500 000 oz/y by 2028.

“This comprehensive financing package will allow Asante to realise the true potential of our assets,” said Asante president and CEO Dave Anthony in a statement.

“This will clear the path to achieve our goal of gold production of more than 500 000 oz/y by 2028 at significantly lower all-in sustaining costs, with over $2-billion of free cash flow generation expected through 2029 as described in our recent five-year outlook.”

The financing package comprises a $150-million senior debt facility, up to $125-million in subordinated debt, and a $50-million gold stream, all subject to definitive agreements and certain conditions, including equity commitments totalling about $130-million. To date, Asante has secured $85-million of these equity commitments, including a $10-million subscription from Appian.

“We are pleased to partner with Appian and RMB, leading mining-focused financial institutions with a rigorous technical approach, in structuring a comprehensive financing solution for Asante,” said CFO David Wiens. “We are on course to being fully funded and well capitalised by the end of July. In addition, a listing on the TSX-V is expected to provide added liquidity and increased exposure to a wider pool of investors.”

The $50-million gold stream from Appian involves the sale of 1.5% of payable gold from the Bibiani and Chirano mines at 20% of the market price for 24 months. The rate increases to 2.25% thereafter until delivery thresholds are met, at which point it drops to 0.3%. Asante retains buyback rights subject to timing and return criteria.

The financing package is contingent on a restructuring agreement with Kinross to settle outstanding deferred consideration. This includes a $53-million cash payment, an equity subscription to raise Kinross's ownership to 9.9%, a convertible debenture with an interest rate of 3%, and a deferred note with a 5% margin above base rate. The instruments mature after the repayment of the senior and subordinated facilities.

Kinross will also relinquish its existing security interest in the Chirano mine, accepting a subordinated position in the new security package.

Completion of the financing package and related transactions is expected by July 31, with the TSX-V listing expected in August, subject to the satisfaction of conditions.