Caracal Gold enters US$10.5mln pre-paid gold deal

Caracal Gold has entered into a pre-paid gold purchase agreement for to finance Kilimapesa expansion. The pre-paid gold sale has been agreed through its wholly owned Kilimapesa Gold Pty Ltd (KPG) subsidiary with OCIM Metals & Mining Sa, a Paris-based trading firm.

Pre-paid gold deal

The Kenyan subsidiary secured conditional non-dilutive financing of US$10.5m. Kilimapesa will be paid in two tranches, with the first of US$7mln to be drawn on or before the end of next month and the second of US$3.5mln to be drawn down on terms to be agreed between OCIM and KPG. The proceeds from this financing will enable Caracal to be fully funded and to continue with the expansion of production at the Kilimapesa gold mine, in Kenya, to the targeted rate of 24 000 oz/y, which is expected by March next year. The funds raised will also be used to complete a Phase 2 exploration programme on Caracal’s Nyakafuru project, in Tanzania, to ultimately advance a preliminary economic assessment on the project.

“A non-dilutive financing is a great outcome for Caracal, KPG and all of the many stakeholders of the Company and the Project. Having funding partners with the calibre of OCIM supporting Kilimapesa, the management and the vision of Caracal is a vote of confidence as we embark on the final push to deliver on our production target of 24,000oz per annum, whilst continuing to advance our regional exploration efforts in Kenya to ultimately build the life of mine and value potential. Alongside this, we are excited by the development opportunity Nyakafuru offers and look forward to progressing our targeted exploration programme to support a Preliminary Economic Assessment,” Robbie McCrae, CEO of Caracal commented.