Gold explorer Vector Resources (ASX: VEC) has secured an additional US$35 million loan to fund its acquisition and definitive feasibility study of the Adidi-Kanga gold project in the Democratic Republic of Congo (DRC).
The company today announced it has accepted the offer of debt funding from Dubai-based FT General Trading, a telecoms and property-focused conglomerate that has recently expanded its interests into commodities and metals trading.
This latest offer follows a US$20 million debt facility Vector executed with Medea Future Materials Fund last month.
The FT General debt facility is intended to be used to satisfy potential repayment of existing indebtedness at the Adidi-Kanga project due to a local DRC bank on completion of the definitive feasibility study and a positive decision to mine.
The funding will be provided in three tranches. An initial US$5 million is to be provided upon legal completion of the acquisition, to be followed by US$10 million upon receipt and presentation of the approved work plan and budget for the definitive feasibility study.
The final US$20 million will be provided upon finalisation of the definitive feasibility study and a positive decision to mine.
According to Vector, formal documentation of the binding terms sheet is well advanced with lawyers in Australia and execution by the parties is scheduled for “later this week”.
Vector first announced its intention to acquire a 60% stake in the Adidi-Kanga gold project in December 2017.
The project is located in the Moto goldfields of the DRC’s Ituri province. It has an estimated mineral resource of 15 million tonnes grading at 6.6 grams per tonne of gold for 3.2 million ounces of contained gold.
The project is currently held by Mongbwalu Gold Mines SA, a joint between Fimosa Capital and Sokimo, although it was previously explored by AngloGold Ashanti between 2005 and 2013.
AngloGold Ashanti had finalised a feasibility study for the development of Adidi-Kanga and even commenced initial mine construction activities before the project was shelved and subsequently sold in 2015.
According to Vector, about 70% of the mechanical equipment was purchased and delivered to site with an estimated cost of over US$70 million.
The mine is already permitted for development with environmental and social impact assessments completed and financial guarantees in place with the appropriate regulatory and administrative bodies.
Now that the debt funding offer has been approved by Vector’s board, the company is awaiting confirmation from its DRC-based lawyers on satisfaction of the remaining conditions to the acquisition.