OreCorp’s Nyanzaga gold project in Tanzania has received strong backing from global banks, with more than $US400 million ($591 million*) of debt funding in the pipeline.
Non-binding expressions of interest have been signed by European, African and Tanzanian banks, with the $US400 million total well in excess of the $US300 million debt target OreCorp established in consultation with financing advisors Auramet International LLC.
And there could be more to come, with OreCorp and Auramet in discussions with several other financial institutions regarding further funding support for Nyanzaga.
“We are pleased with the strong interest we have received to date from banks with respect to financing the project,” OreCorp executive chair Matthew Yates said.
“The expressions of interest received give us further confidence in our ability to deliver on a comprehensive financing package for the project which meets our objectives of prudently managing leverage and minimising dilution to the company’s existing shareholders.”
It comes after OreCorp delivered its definitive feasibility study (DFS) for Nyanzaga in August, with the project expected to produce an average of 234,000 ounces (oz) of gold per annum at an average all-in sustaining cost of $US954/oz across 10.7 years.
Peak gold production is expected to be 295,000oz per annum, with Nyanzaga to average 250,000oz per annum across the first eight years.
Since the appointment of Her Excellency Samia Suluhu Hassan as Tanzania’s new president in March 2021, the country has experienced a step change in its political direction, with the mining sector a major beneficiary.
Tanzania’s royalty rate has dropped from 6 per cent to 4 per cent in certain circumstances, which could further bolster OreCorp’s financing strategy.
“The company is further considering how it may take advantage of the reduced royalty rate to implement other arrangements that may complement, enhance or partially replace the debt financing,” OreCorp said in a statement.
“As regards such arrangements, initial discussions with credit funds, royalty and streaming providers have indicated strong interest in the project.”
OreCorp is targeting first gold from Nyanzaga in the first half of 2025.
*The Australian dollar conversion is accurate as of Friday November 25.