Cora Gold (LSE:CORA) has provided an update on funding arrangements for its Sanankoro Gold Project in southern Mali as the company continues discussions over introducing senior debt alongside its existing US$120 million gold stream.
The company previously agreed the gold streaming arrangement with Eagle Eye Asset Holdings to finance Sanankoro through development and into production. Under the agreement, Eagle Eye is entitled to receive a proportion of the mine’s life-of-mine gold production at a discount to prevailing spot prices.
Cora retains the option to replace as much as half of the streaming facility with conventional senior debt, potentially changing the overall funding structure for the project.
Cora targets around US$60 million of senior debt
Following agreement of the streaming term sheet, Cora appointed Hannam & Partners as its financial adviser to explore alternative financing arrangements.
The company is now in active discussions with banks in West Africa regarding approximately US$60 million of senior debt. To provide additional time for these negotiations, the window allowing Cora to restructure the balance between debt and streaming finance has been extended.
Management believes combining traditional senior debt with the existing gold stream could improve the economics of the Sanankoro development and provide a more efficient overall financing structure.
Sanankoro permitting continues to advance
Financing discussions are progressing alongside work to secure the necessary permits for mine development.
Cora reported constructive engagement with the Malian authorities and has secured the interim renewal of the Sanankoro II exploration permit. The company considers this an important step towards obtaining the mining rights required before construction can proceed.
Continued progress on both permitting and financing will therefore be central to moving Sanankoro towards its planned development phase.
The Eagle Eye financing is classified as a related party transaction under AIM rules because Eagle Eye is Cora’s largest shareholder. Cora’s board, excluding Eagle Eye’s representative, has concluded that the terms of the arrangement are fair and reasonable for shareholders.
Financing and permitting remain key catalysts
The potential introduction of senior debt provides Cora with greater flexibility as it works towards developing Sanankoro. A blended funding structure could reduce reliance on the gold stream while allowing the company to retain sufficient capital to advance construction.
However, Cora remains a pre-revenue developer and continues to record losses and cash outflows, limiting support from conventional earnings-based valuation measures.
Technical indicators provide a more constructive signal, with the shares trading above major moving averages and MACD remaining positive. Nevertheless, progress on financing, permitting and ultimately mine development remains central to the company’s longer-term investment case.
More about Cora Gold
Cora Gold Limited is a West African gold exploration and development company with projects in Mali and Senegal across two established gold belts.
Its flagship asset is the Sanankoro Gold Project in the Yanfolila Gold Belt of southern Mali, where the company plans to develop an open-pit oxide operation. The project is supported by a Probable Reserve of 531,000 ounces of gold and feasibility work outlining its potential economics.
Cora has secured a US$120 million gold streaming facility to fund Sanankoro towards production while retaining the ability to introduce senior debt into the financing structure. The company is also exploring additional mineralisation opportunities at its Madina Foulbé permit in eastern Senegal.
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