Asante Gold (CNSX: ASE) (OTCMKTS: ASGOF) is raising USD$525 million to finance extensive development plans at its key assets in Ghana, including the Bibiani and Chirano gold mines.
The company announced on Friday that this funding initiative will occur in two stages with USD$325 million expected by the end of 2024, and the remaining USD$200 million should be secured in early 2025.
The first stage includes a USD$100 million equity private placement, a refinancing arrangement of approximately USD$100 million with Kinross Gold (NYSE: KGC) (TSE: K), a USD$75 million Ghanaian bond, and a USD$50 million gold stream facility.
These funds will cover projects such as a sulphide plant, pit expansion, and upgrades to equipment and facilities. The second stage will bring in USD$150 million through senior debt and an additional USD$50 million from a strategic investor.
Additionally, Asante Gold plans to direct part of the financing package toward advancing the Kubi Gold Project, which is currently in the technical study phase. The company aims to use this project to increase its annual gold output, as well as enhance its resource profile and reserve base.
At the same time, Asante will apply funds to operational improvements at Chirano, targeting a gold recovery rate of 92 per cent and an annual processing capacity of up to 4 million tonnes. These upgrades should drive a substantial increase in cash flow beginning in 2025.
This financing effort also includes a strategic move to restructure Asante’s balance sheet, reducing debt to provide greater financial flexibility and stability. Additionally, Asante intends to support exploration across its Ghanaian land holdings, known for high exploration potential, and may pursue acquisitions to expand its mining portfolio.
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Social media has responded positively to the move
Long-term investors in Asante Gold have seen notable stock price gains recently, driven by the company’s strategic initiatives. This capital raise aims to further boost shareholder value by increasing production and profitability.
“It will transform our balance sheet and support execution of our growth plan to achieve gold production above 500,000 ounces per year by 2028, at significantly lower all-in sustaining costs,” said Dave Anthony, Asante Gold president and CEO.
“We look forward to welcoming our new Ghanaian and international financing partners, who recognise the unique opportunity we have to establish Bibiani-Chirano as Africa’s next Tier One gold district, against the backdrop of a historic gold bull market.”
Financial circles on social media have shown optimism about this move, where the emphasis on local Ghanaian investment has gained attention. By involving local investors in Ghana’s mining growth, Asante not only promotes wealth distribution but also supports the local economy through shared ownership in the country’s leading gold operations.
Last month, Asante Gold secured an equity financing deal with a strategic investor, agreeing to sell approximately 90,000 common shares at CAD 1.50 per share. This transaction will generate total gross proceeds of CAD$136 million. In addition to the placement, Asante arranged preliminary terms to adjust the repayment schedule with Kinross Gold.
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joseph@mugglehead.com
