The company made a gold purchase deal for its Bau project with Quatum in late September. Pic: via Getty Images.
Mining
Besra Gold has received US$10m from Quantum Metal Recovery as part of a US$300m facility — one of the largest deals of its kind signed by an ASX listed junior – to build a mine at the ~3Moz Bau project in Malaysia’s Sarawak region.
The goldie went parabolic late March after inking a $US300m offtake and funding deal with bullion dealer and major shareholder Quantum Metal Recovery.
This cash – paid over 30 months against future production ounces — would cover development of its 3Moz ‘Bau’ project.
To settle the facility, Besra Gold (ASX:BEZ) would deliver up to 3Moz “according to an agreed percentage of production at an agreed floating gold reference price, but subject to a floor price (117.5% of AISC)”.
BEZ has now received a total of US$15m from Quantum, consisting of today’s US$10m initial drawdown, and an earlier deposit of US$5m.
Importantly, the facility is not debt, is interest free and is expected to remove the need for dilutive equity financing and project/corporate debt “that would otherwise encumber Besra with hedging requirements and/or onerous covenants”, it says.
The focus right now is commissioning the pilot plant – a smaller version of the real thing — and updating the 2012 Jugan Feasibility Study leading to commercial development.
“Coming on the second anniversary of Besra’s listing, the transfer of the first US$10,000,000 underscores the progress Besra has made since listing and sets the company up well for its move back into commercial production, unlocking the undoubted potential of our exciting Bau project,” exec chair Dato’ Lim Khong Soon says.
Executive director John Seton said the USD10m received represents the first (October) tranche following the company’ September AGM.
“Monthly tranches are scheduled to be paid out in the first week following each month, so in the ordinary course we can expect to receive further tranches at the beginning of each month,” he said.
The project is on the island of Borneo, within the rich Bau goldfield corridor which has a resource of 3.4Mt at 1.5g/t for 166,900oz of contained gold in the measured category, 16.4Mt at 1.6g/t for 824,000oz in indicated ounces and a hefty 47.9Mt at 1.3g/t for 1.99Moz in the inferred category.
Jugan is the most advanced prospect within Bau with current high confidence Measured and Indicated Resources of 870,000 ounces of gold at an average grade of 1.5 grams per tonne (g/t) as well as a further 90,000oz at 1.6g/t in the Inferred category.
Drilling carried out in 2021-2022 had confirmed the standalone development potential for Jugan including higher grades, with mineralisation starting from surface meaning that any mine will benefit from a low strip ratio.
The company recently announced more eye-popping exploration success in the region with a 1,450m follow up drilling program at its Bekajang project confirming its ‘multi-storey’ endowment with at least two levels of gold mineralisation now identified.
“With the results we are seeing from our drilling, we are more and more confident of the large-scale potential of Bau,” Seton said.
“This funding gives us the confidence to increase our exploration activity as well as progressing development of the project.
“Quantum are really putting their shoulder to wheel assisting us with our relationships on the ground in Malaysia,” he said.
This article was developed in collaboration with Besra Gold, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Mining
Mining
Mining
Mining
Mining
Mining
Get the latest Stockhead news delivered free to your inbox.
