Besra Gold Secures Major Funding Agreement for Bau Gold Project
Besra Gold Inc.
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Besra Gold Secures Major Funding Agreement for Bau Gold Project

Besra Gold Inc (ASX: BEZ), a Canadian gold mining company, has finalised a significant funding agreement for its Bau Gold Project in Sarawak, Malaysia. The company announced on May 9th that it had signed a binding Gold Purchase Agreement (GPA) with its major shareholder, Quantum Metal Recovery Inc (Quantum), marking a major milestone for the project.

Under the GPA, Quantum has committed to providing Besra with up to US$300 million in exchange for future gold production ounces from the Bau project. The funding will be disbursed over a span of 30 months, enabling Besra to fully finance the development and production of the Bau project, as well as the assessment of other deposits within the Bau goldfield corridor.

Besra believes that this facility is one of the largest deals of its kind signed by an ASX-listed junior mining company. The funding agreement eliminates the need for dilutive equity financing and project/corporate debt, which would impose hedging requirements and onerous covenants on Besra. The facility is expected to be delivered in instalments of up to US$10 million per month.

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Besra has already received an initial deposit of US$2 million from Quantum, with the remaining balance expected to be received within three business days after the fulfilment of the conditions precedent. The company aims to have the facility fully operational, including the first drawdown of US$10 million, by June 30th, 2023, subject to the completion of the remaining conditions.

In addition to the funding agreement, Besra also announced some management changes as it transitions from exploration to development and production. Dr. Ray Shaw, who has been the CEO of Besra since 2010, will step down as CEO and assume the role of Chief Operating Officer, focusing on in-country development and exploration activities. Jocelyn M. Bennett, a non-executive director of Besra since 2018, has been appointed as the Executive Chair of Besra. The company has engaged Acacia Executive Search to recruit a replacement CEO.

Jocelyn Bennett, Executive Chair of Besra, expressed her enthusiasm for the progress made with the funding agreement and the accompanying corporate changes. She emphasised that the facility would provide ample funding for the development of the Bau project, allowing Besra to bring the project into production in a way that is non-dilutive to its shareholders and retains exposure to gold price movements without hedging or other burdensome obligations. Bennett also thanked Dr. Ray Shaw for his valuable contribution as CEO and his leadership in advancing the Bau project.

The funding agreement and management changes represent significant steps forward for Besra Gold as it moves closer to production at its 3 million ounce Bau Gold Project. With ample funding secured, the company is well-positioned to advance the project and capitalise on the potential of the gold market.

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