Toubani Resources has nabbed a game-changing $29 million in fresh capital corner-stoned by veteran African resource financier Eagle Eye Asset Holdings and an eye-popping US$160M (A$250M) debt facility to fast-track the company’s flagship Kobada gold project in Mali.
The company’s two-tranche placement has pulled in heavyweight backing, with new strategic investor A2MP Investments – the Singapore-based arm of Eagle Eye – tipping in $15.2M at 24 cents per share at a 7.8 per cent premium to the 30-day VWAP.
A2MP now holds an 18 per cent stake in Toubani, bolstered with the support of pan-African banking powerhouse Afreximbank, which sits on a huge US$40 billion balance sheet.
Toubani will also issue one free unlisted three-year option for every share issued under the placement, exercisable at 33.6 cents a share. The company says the placement was strongly supported by institutional and sophisticated investors, including Toubani’s board, which plans to chip in $290,000 subject to shareholder approval.
Toubani Resources also landed another major funding milestone by signing a non-binding, non-exclusive commitment to provide at least US$160M in debt funding from A2MP.
Management says the hefty facility, if finalised, will cover a significant portion of the estimated project capex without further diluting its shareholders’ interests. Subsequently, the funding package will form a key plank in Toubani’s broader financing strategy as it accelerates toward the development of its massive gold project and a final investment decision by late 2025.
The financing initiatives come hot on the heels of definitive feasibility study last year that delivered a spectacular set of numbers.
With a total indicated and inferred gold resource of 78 million tonnes at an average grade of 0.88 grams per tonne gold for 2.2 million ounces of gold, Kobada is shaping up to be one of West Africa’s next big gold developments.
Using a gold price of US$2200 (A$3444) per ounce and investment capital expenditure of US$216M (A$338M), the study threw up a post-tax net present value of US$635m (A$994m).
If a more generous gold price of US$2600 (A$4070) is applied – but still 30 per cent cheaper than the current spot price – the net present value jumps to a massive US$897M (A$1.4 billion).
Kobada is forecast to produce 162,000 ounces of gold per year at an all-in sustaining cost base of just US$1004 per ounce (A$1570) to deliver $US166M (A$259M) in annual pre-tax cash flows across an initial 9.2-year mine life.
This strategic partnership adds EEA’s and Afreximbank’s strong track record of project execution and development in Africa with Toubani’s technical capabilities, aligning perfectly with our goal of unlocking value from our premier Kobada oxide gold project.
Echoing Russo’s sentiments, A2MP management also flagged Kobada gold project as a strong investment opportunity. As part of the deal, A2MP director Gaurav Gupta will join Toubani’s board to bring extra firepower to the Toubani’s project finance and stakeholder engagement strategy.
A2MP brings serious African mining pedigree to the table, with an investment track record that includes FG Gold’s 5.8-million-ounce Baomahun gold project in Sierra Leone, Canyon Resources’ 108Mt bauxite play in Cameroon and Prospect Resources’ 107Mt Mumbezhi copper asset in Zambia.
With that kind of firepower and deep-rooted connections to African debt and equity markets, Toubani’s Kobada project is poised to reap the rewards of A2MP’s well-worn playbook.
Toubani’s milestones ahead include finalising investment agreements with the Malian government, completing environmental and social permitting and launching a pre-engineering program to de-risk construction.
As an oxide-dominant style deposit spread over a large, underexplored footprint, the company sees a massive amount of deeper untapped potential at Kobada.
With that in mind, the diamond rigs are preparing to shift into position to target depth extensions beneath the known resource, where average drilling has only penetrated about 110 metres.
With A2MP and Afreximbank in its corner, financing starting to take shape, plenty of exploration upside and a booming gold price, Kobada appears to be shaping up as a golden goose for Toubani as it stakes its claim on becoming a soon-to-be flagship gold producer in West Africa.
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https://thewest.com.au/business/bulls-n-bears/toubani-nabs-29m-in-new-cash-and-250m-debt-deal-for-mali-gold-play-c-18537918
