Aura Secures Additional US$31 million in Financing and Announces Fully Funded Construction for the Borborema Project
06 December 2023 - 8:20PM
Aura Minerals Inc. (TSX: ORA, B3: AURA33 and OTCQX: ORAAF)
(“Aura” or the “Company”) is pleased to announce that
Borborema Inc. (“
Borborema”), a wholly owned
subsidiary and indirect owner of the Company’s Borborema gold
project in Rio Grande do Norte State, Brazil (the
“
Borborema Project”), has entered into an
agreement with Gold Royalty Corp. (“
Gold Royalty”)
to secure US$31 million in financing to develop the Borborema
Project (the “
Transaction”). The US$31 million in
financing is composed of a US$21 million net smelter return royalty
over the Borborema Project (the “
NSR Royalty”) and
a US$10 million gold-linked loan (the “
Gold-Linked
Loan”).
Together with the US$100 million term loan
previously entered into with Banco Santander Brazil and US$14
million raised through gold collars with several financial
institutions, Aura, through its subsidiaries, has now secured over
US$145 million towards construction of the Borborema Project, which
has an estimated total construction capex of US$188 million.
Key Financing Terms
NSR Royalty:
- Upfront
Payment: US$21.0 million in cash upon closing of the
Transaction.
- Royalty
Terms: Gold Royalty acquired a secured 2.0% net smelter
return royalty on the first 725,000 ounces produced from the
Borborema Project.
-
Stepdown: The NSR Royalty will decrease to 0.5%
after 725,000 ounces of payable gold is produced from the Borborema
Project.
- Buyback
Option: The remaining 0.5% of the NSR Royalty will be
subject to a US$2.5 million buyback at Borborema’s option
exercisable by Borborema after the earlier to occur of (i) of
2,250,000 ounces of payable gold being produced at the Borborema
Project, or (ii) January 1, 2050.
-
Pre-production Payments: Borborema will make
quarterly payments to Gold Royalty of 250 ounces of gold (1,000
ounces per year). The pre-production payments will cease upon the
earlier of (i) the date of commencement of commercial production of
the Borborema Project; and (ii) the tenth (10th) year anniversary
of the closing of the Transaction.
-
ESG Co-Investment Payments: Gold Royalty will make
ongoing payments to Borborema of US$30 per gold equivalent ounce
delivered or paid to Gold Royalty. These payments are earmarked for
ESG related investments by Borborema, up to a maximum of
US$300,000.
Gold-Linked Loan:
- Loan
Principal: US$10.0 million paid to Borborema in cash upon
closing of the Transaction.
-
Maturity: 6 years from closing of the
Transaction.
-
Prepayment: The loan can be prepaid at any time
commencing on the 24 month of the closing of the Transaction
subject to certain prepayment costs.
- Quarterly
Interest Payments: Quarterly coupon payments of minimum
110 ounces of gold (440 ounces per year). Coupon payments can be
made via cash settlement or physical delivery of gold.
-
Conversion: Upon maturity, Gold Royalty has the
option to be:
- Paid US$10 million
cash; or
- Paid US$5 million in
cash plus receive a 0.5% net smelter return royalty over the
Borborema Project.
-
Security: The Gold-Linked Loan will be secured
against certain mining concessions relating to the Borborema
Project and a pledge of the shares of the Borborema operating
entity, with the Company's interests thereunder subordinated to
senior project financing lenders. The Gold-Linked Loan is also
guaranteed by Aura.
Rodrigo Barbosa, President & CEO commented,
“We have successfully concluded our financing plan for the
Borborema project with an additional US$31 million from Royalty and
Gold Loan Agreements, bringing our total external funding to US$
145 million. This amount, together with our own cash fully
addresses the projected US$188 million capital expenditure. This
diversified funding strategy, which encompasses debt, royalty, gold
loan, and positive collars, aligns perfectly with our goal to
mitigate financial risks while enhancing shareholder equity
returns.”
Completion of the Transaction is subject to customary conditions
and is currently expected to be completed in December 2023, with an
outside date of January 31, 2024.
About Aura 360° Mining
Aura is focused on mining in complete terms –
thinking holistically about how its business impacts and benefits
every one of our stakeholders: our company, our shareholders, our
employees, and the countries and communities we serve. We call this
360° Mining.
Aura is a mid-tier gold and copper production
company focused on the development and operation of gold and base
metal projects in the Americas. The Company’s four producing assets
include the San Andres gold mine in Honduras, the EPP and the Almas
gold mines in Brazil and the Aranzazu copper-gold-silver mine in
Mexico. In addition, the Company has the Tolda Fria gold project in
Colombia and four projects in Brazil, of which three gold projects:
Borborema and Matupá, which are in development; and São Francisco,
which is on care and maintenance. The Company also owns the Serra
da Estrela copper project in Brazil, Carajás region, under
exploration stage.
Forward-Looking Information
This press release contains “forward-looking
information” and “forward-looking statements”, as defined in
applicable securities laws (collectively, “forward-looking
statements”) which include, but are not limited to,
statements with respect to the activities, events or developments
that the Company expects or anticipates will or may occur in the
future.
Known and unknown risks, uncertainties and other
factors, many of which are beyond the Company’s ability to predict
or control, could cause actual results to differ materially from
those contained in the forward-looking statements. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. Specific reference is
made to the most recent Annual Information Form on file with
certain Canadian provincial securities regulatory authorities for a
discussion of some of the factors underlying forward-looking
statements, which include, without limitation, the ability of the
Company to close the Transaction, the Company’s ability to achieve
its short-term and longer-term outlook and the anticipated timing
and results thereof, the ability to lower costs and increase
production, the ability of the Company to successfully achieve
business objectives, copper and gold or certain other commodity
price volatility, changes in debt and equity markets, the
uncertainties involved in interpreting geological data, increases
in costs, environmental compliance and changes in environmental
legislation and regulation, interest rate and exchange rate
fluctuations, general economic conditions and other risks involved
in the mineral exploration and development industry. Readers are
cautioned that the foregoing list of factors is not exhaustive of
the factors that may affect the forward-looking statements.
All forward-looking statements herein are
qualified by this cautionary statement. Accordingly, readers should
not place undue reliance on forward-looking statements. The Company
undertakes no obligation to update publicly or otherwise revise any
forward-looking statements whether as a result of new information
or future events or otherwise, except as may be required by law. If
the Company does update one or more forward-looking statements, no
inference should be drawn that it will make additional updates with
respect to those or other forward-looking statements.
For more information, please contact:
Investor Relations
ir@auraminerals.com
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