Aim-listed Katoro Gold has received expressions of interest for funding of an amount significantly more than the peak funding requirement of $36.4-million for the company's Blyvoor joint venture (JV) in respect of the Blyvoor gold tailings project.
The expressions of interest for funding include, besides others, a formal nonbinding term sheet for funding, which if agreed and accepted by the Blyvoor JV, will be sufficient to fund up to 40% of the peak funding requirement.
Any funding agreement with the various prospective funders are subject to several principal conditions, as set by the prospective funders.
This entails that the JV must complete and deliver a restated resource and reserve statement for the project and must prepare and deliver an independent valuation report for the project.
Moreover, it must complete due diligence investigations by each of the prospective funders, and the Blyvoor JV, which is currently unincorporated, must be converted into an incorporated venture.
Katoro reports that the technical reports referenced are at an advanced stage of preparation and final draft versions have been received for review and will be available for release shortly to the potential funding parties.
In terms of the third condition, prospective funders have commenced due diligence investigations, with completion subject to receipt of the technical reports.
Lastly, the JV partners have already agreed to proceed with the incorporation of the unincorporated Blyvoor JV and are currently negotiating the final terms and conditions of incorporation which will ensure due alignment with the parties’ rights and interests as captured under the existing unincorporated version of the Blyvoor JV.
The existing Blyvoor JV agreement will remain in place until the Blyvoor JV has been incorporated as detailed above.
“We are delighted that the company has reached a significant milestone with expressions of interest for Blyvoor funding of an amount significantly more than the peak funding requirement,” comments CEO Louis Coetzee.
Further, Katoro notes that the impact of Covid-19 remains a “debilitating reality” and it will, based on current projections, continue to influence the pace and manner in which agreed deadlines can be met.
It says that, over the past months, Covid-19 has contributed to significant delays in various aspects of ongoing work on the project. It notes that the company and its JV partners have been able to contain and mitigate this very effectively to date and believes it will be able to do so for the foreseeable future on account of thorough and diligent contingency planning.
“Despite the challenging conditions faced by all parties during the Covid-19 pandemic, the JV partners pushed ahead with the exploration and technical work related to the upgrade of the Blyvoor project resource and reserve statement and delivery of an independent valuation report. The release of both these documents is imminent and forms an integral part in the final delivery of the Blyvoor funding package.
“The board of directors also believe that the impending incorporation of the unincorporated Blyvoor JV delivers a clear indication that the requirements set out by potential investors are nearing completion,” says Coetzee.