As it continues its strategy on becoming West Africa’s next gold producer, Tietto Minerals (ASX: TIE) has reported strong interest in funding development of its Abujar project in Cote d’Ivoire.
Following the release of its definitive feasibility study (DFS) last month, the company has received several non-binding debt offers up to US$180 million (A$243 million) from overseas institutions.
A decision will be made on the lender this month.
Attractive commercial terms
The offers to finance development of Abujar have ranged between US$120 million (A$162 million) and US$180 million (A$243 million), with Tietto saying they are based on “attractive commercial terms” consistent with this field of financing.
“We are extremely pleased with the quality of the institutions that have indicated their interest to provide the project funds needed to develop the Abujar gold project into West Africa’s next gold mine,” Tietto managing director Dr Caigen Wang said.
He added the indicative offers showcase the project’s technical and financial strengths.
Positive definitive feasibility study
Tietto’s DFS for Abujar is based on open pit probable ore reserves of 34.4 million tonnes at 1.3 grams per tonne gold for 1.45 million ounces.
There is plenty of upside with resources currently standing at 3.35Moz contained gold and expected to continue growing as drilling advances.
Capital expenditure is estimated in the region of U$200 million (A$270 million) to generate life of mine revenue of US$2.87 billion (A$3.87 billion). This is expected to produce post-tax cash flow of US$970 million (A$1.3 billion).
The initial mine life is 11 years, with 260,000oz gold expected in the first year and 1.2Moz anticipated in the first six years of mining – averaging about 200,000ozpa of gold output.
Drilling creates further upside
Ongoing drilling at the project has intercepted more bonanza gold hits including a 2m interval grading 102.39g/t last month.
“We are confident the Abujar gold project will continue to enjoy growth in both resources and reserves through our continued large-scale drilling program,” Dr Wang said.
First gold in 2022
Tietto is eyeing first gold production in the December quarter of next year.
The company has $31 million in the bank to fund its ongoing exploration and development, with a US$8.65 million (A$11.67 million) early work program already underway at Abujar.