AFC to invest $78 million in West Africa-focused mining company

15 Apr 2019
Financial Nigeria


First gold from the project is anticipated to be made in the first quarter of 2020.

Samaila Zubairu, President & Chief Executive Officer, Africa Finance Corporation

Thor Explorations Ltd – a Canadian exploration company engaged in the acquisition, exploration and development of mineral properties in West African countries – has announced that it has signed a financing agreement of $78 million with Africa Finance Corporation (AFC). This follows the completion of the definitive feasibility study of the Canadian company’s Segilola Gold Project released in February.

The Segilola Gold Project is Thor’s flagship project in Nigeria. It is hosted under the ML41 mining licence and located in Osun State. The financing will be used to ramp up construction, which is expected to run for 18 months. Thor is also present in Senegal and Burkina Faso.

According to a statement by Thor on Monday, the financing is subject to mutually satisfactory documentation, approval from the AFC’s Board, completion of due diligence and other customary conditions, which are expected to be completed in May 2019.

The financing consists of a five-year $54 million senior credit facility, $9 million gold stream pre-payment and a $15 million equity investment. As a result of the financing agreement, AFC – a pan-African development finance institution – has become an investor in Thor, owning 99,750,000 of Thor’s ordinary shares.

“This is an extremely significant milestone for us and for the mining sector of Nigeria,” said Segun Lawson, President and CEO of Thor Explorations Ltd. “Our definitive feasibility study demonstrated the robustness of the Segilola Gold Project and now we are pleased and looking forward to partnering with AFC as both a lender and long-term shareholder of Thor. We look forward to successfully implementing this landmark project in Nigeria.”

First gold from the project is anticipated to be made in the first quarter of 2020, while production is expected to average at 80,000 ounces (oz) in the first five years of the mine-life. According to the statement, the ore reserves at Segilola Gold Project are estimated to be three million tonnes with up to 405,000 oz of gold, grading 4.2 grammes per tonne (g/t).

For the company to be fully funded to production, including financing costs, cost overrun capacity, general corporate purposes and other exploration activities during the construction period, Lawson said, “we will also be seeking to raise an additional $18 million from debt or equity sources.”

Founded in 1968, Thor evaluates existing and under-explored highly prospective geological regions of West Africa, seeking to access opportunities early in the exploration value chain. It hopes to benefit from its first mover advantage in Nigeria.

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