Besra has received the second tranche US$3m initial payment from its US$300m funding agreement provided by Quantum Metal Recovery to fund development of its 3Moz Bau gold project.

This takes the total received by the company up to US$5m and certainly demonstrates that funding – one of the largest of its kind signed by an ASX-listed junior – is very much in place to take the project into production.

Quantum will only become committed to deliver $10m a month to Besra Gold (ASX:BEZ) once all the conditions to the Gold Sales Agreement (including approval by shareholders) are satisfied.

Right up at the top of the priority list is updating the 2012 Bau Feasibility Study, which envisages the project as a base case +110,000oz gold open-pit mine with a four year life of mine based on a 1.1Moz Measured and Indicated resource and a 12-18 month construction period.

The updated study will refresh cost estimates for a +100,000oz project, which will benefit from drilling in 2021-22 that confirmed standalone development potential including higher grades at the Jugan ore body.

Bau contains a JORC 2012 compliant resource including 3.4Mt at 1.5g/t for 166,900oz in measured resources, 16.4Mt at 1.6g/t for 824,000oz in indicated ounces and 47.9Mt at 1.3g/t for 1.99Moz in inferred resources.

There is also potential for further growth through the global Exploration Target of between 4.89Moz and 9.27Moz at grades of 1.7g/t gold to 2.5g/t gold.

Funding agreement

The US$300m facility is being made available to Besra as an effective 5% deposit of the Reference Price – the five-day average of the London Metal Market gold price with a floor price of 115% of the all-in-sustaining cost at the time of delivery – on future gold production up to 3Moz.

Once production begins, Besra will receive the remaining 85% of the Reference Price – including a 10% discount and less the pre-paid deposit – for each ounce of refined gold sold to Quantum until 3Moz has been received by Quantum or aggregate deposits equivalent to US$300m have been received by Besra from Quantum.

Deliveries to Quantum are to be made from all gold produced up to 25,000 ounces of gold and thereafter 65% of gold produced, leaving 35% of production unassigned.




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.