TSX-listed Thor Explorations has executed an agreed term sheet with pan-African development finance institution, the Africa Finance Corporation (AFC), for a $78-million financing package for the construction and ramp-up of its Segilola gold project in Nigeria.
This follows the completion of a definitive feasibility study (DFS) in February.
The financing is subject to mutually satisfactory documentation, AFC board approval, completion of due diligence and other conditions precedent, which are expected to be completed in May.
The funding constitutes a $54-million senior secured credit facility, a $9-million gold stream prepayment and a $15-million equity investment from AFC.
It represents the introduction of a new strategic investor into Thor.
Thor president and CEO Segun Lawson told Mining Weekly Online on Monday that the AFC had been looking to enhance its mining exposure, and Segilola was the ideal project, given its attractive economics and good upside potential in terms of growth.
Thor will now proceed with turnkey engineering, procurement and construction (EPC) contract finalisation and the start of construction works. The first production is targeted within 18 months of the start of the EPC contract.
Lawson highlighted the financing as an “extremely significant milestone for Thor and for the mining sector of Nigeria”.
He stated that Segilola was a landmark project in Nigeria’s gold mining sector. He also highlighted the potential for further exploration investment in the country, which is relatively underexplored.
Meanwhile, Lawson mentioned that the company had also recently completed a preliminary economic assessment on the Segilola underground resource, which showed “great potential”.
Thor is hopeful that further underground drilling and exploration during the openpit construction period will considerably increase the company’s reserves.
The company will also seek to raise a further $18-million from debt or equity sources to ensure it is fully funded to production.