• Thu. May 23rd, 2024

Bau Gold Project – US$300m Finance Facility and Management changes

Binding Gold Purchase Agreement (Facility) for up to US$300m signed with major shareholder Quantum Metal Recovery Inc (Quantum), giving effect to the non-binding term sheet previously announced (Refer ASX announcement 21 March 2023).

The Facility provides up to a US$300m deposit, to be paid over 30 months, against future gold production ounces, enabling Besra to fully fund production at Bau and the appraisal of other deposits within the Bau goldfield corridor.

Besra believes the financing to be one of the largest deals of its kind signed by an ASX listed junior.

The Facility is expected to remove the need for dilutive equity financing and project/corporate debt encumbering Besra with hedging requirements and/or onerous covenants and is expected to be delivered at up to US$10m per month.

Besra confirms receipt of the first US$2,000,000 instalment of the US$5,000,000 Initial Deposit with the balance to be remitted to the Company by no later than 3 business days after the Conditions Precedent have been satisfied.

Besra continues to target fully operational Facility (including date of first drawdown of US$10m) by 30 June 2023 (subject to completion of remaining CPs).

Management Changes

With Bau moving toward the development phase Dr Ray Shaw has agreed to step down as CEO and move into the role of Chief Operating Officer to focus on in-country development and exploration activities.

Acacia Executive Search have been appointed to recruit a replacement CEO for the Company.

Jocelyn M. Bennett has been appointed to assume the role of Besra’s Executive Chair.

Besra’s Executive Chair, Jocelyn Bennet, commented: ‘The announcement of progress this landmark agreement, as well as the accompanying corporate changes, moves Besra’s 3Moz Bau Gold Project closer to production. In particular, this extraordinary funding deal should provide ample funding for the development of Bau and allows us to bring the project into production in a way that is uniquely non-dilutive to our shareholders and to retain exposure to gold price movements, free of hedging or other onerous covenants. Whilst we have several Conditions Precedent yet to fulfil we expect the US$300m Facility to be fully operational by June 30, 2023.

I would also like to take this opportunity to thank Ray Shaw for his valuable contribution as CEO of Besra over many years and the work he has led to date on the Bau Project. We feel that the development and exploration potential of the project he has helped unlock should be the envy of our peers’

Binding Gold Purchase Agreement

The Board of Besra Gold Inc (ASX:BEZ) (ARBN 141 335 686) (Besra or the Company) is very pleased to announce that it and its wholly owned Malaysian subsidiary North Borneo Gold Sdn Bhd (NBG) have today entered into a legally binding Gold Purchase Agreement (GPA) with the Company’s major shareholder, Quantum Metal Recovery Limited (Quantum), giving effect to the non-binding term sheet announced on 21 March 2023.

Conditions Precedent

The Facility is conditional upon the following Conditions Precedent being satisfied within 85 business days of the after the date of the GPA (or such longer period as may reasonably be required): completion of security documentation (Security)

; shareholder approvals in accordance with ASX Listing Rule 10.1 for both the Facility and the Security (BDO has been engaged to provide an independent expert’s report on the transactions); ASX and Canadian Business Corporations ACT (CBCA) regulatory compliance and/or approvals.

Initial Deposit

As announced to ASX on 4 April 2023, the Company advised of the receipt of the first US$2,000,000 instalment of the US$5,000,000 Initial Deposit.

The second instalment of US$3,000,000 of the Initial Deposit is to be remitted to the Company by no later than 3 business days after the Conditions Precedent have been satisfied.

Further Deposits

On and from the satisfaction of the Conditions Precedent, Quantum is to provide cash payments in an amount, or amounts, not exceeding (in aggregate) US$10,000,000 per month to acquire additional refined gold from the Company up to the maximum deposit limit of US$300,000,000.

Timetable

Given that shareholder and other approvals are required, it is the Company’s expectation that practical satisfaction of the Conditions Precedent will be completed by the end of the second quarter of 2023.

Security

NBG is to provide an upstream guarantee in respect of the obligations of the Company (whose obligations are provided on a limited recourse basis) under the GPA. Subject to the receipt of shareholder approval, Security will be provided to Quantum over the Company’s indirect shareholding in NBG, its interest in the tenements comprising the Bau goldfield and a bank account into which deposits in respect of gold purchased will be remitted to by Quantum.

Noblemen Ventures Pty Ltd is to be paid a 5% commission payable on Besra’s drawdown of funds from Quantum. The commission has been agreed by Quantum and will be included in the AISC calculation. Noblemen is a small shareholder (

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