US$120-millionfinancing commits funds to construct Karma without need for additional equity -- Funding provides True Gold with the flexibility to deliver base case outlined in the Karma Project Feasibility Study(1) and scale up quickly, with the goal of becoming a high-margin, mid-tier gold producer -- Significant construction to begin next month, with first gold pour anticipated by the end of 2015 -- Agreement is a strong endorsement of Karma and the project's long-term growth potential from two leading royalty and streaming companies -- Funding package provides capital at more favourable terms than traditional project financing -- True Gold now ranks among a select group of emerging producers worldwide with a permitted, fully funded project
"It is a pleasure to welcome Franco-Nevada and Sandstorm and their high-calibre management teams as our newest partners on the
"I would also like to thank our cornerstone investors, Liberty Metals and Mining and Teck Resources, for their leadership roles in supporting the advancement of Karma over the past year. Since
"We are pleased to be partnering with both True Gold and Sandstorm in supporting the development of Karma, a robust project with low capital and operating costs on a property that has excellent exploration potential," said
With permits secured to build the mine envisioned in the Feasibility Study and development fully funded, True Gold's Board of Directors has approved a construction decision and is targeting first gold pour for the end of 2015. Karma will be the seventh mine built in
Burkina Fasowithin the past five years. KEY TRANSACTION TERMS -- Franco-Nevada and Sandstorm (the "Syndicate") will provide True Gold with US$100 millionin funding, currently split 75% for Franco-Nevada and 25% for Sandstorm. -- Over a period of five years, starting March 31, 2016(the "Delivery Period"), True Gold shall purchase and deliver to the Syndicate an aggregate of 20,000 ounces of gold each year, for a total of 100,000 ounces of gold. During the Delivery Period, the Syndicate will pay True Gold 20% of the spot price of gold ("Ongoing Payment") for each ounce purchased and delivered by True Gold. -- Following the Delivery Period, True Gold shall purchase and deliver to the Syndicate an amount of refined gold equal to 6.5% of the equivalent amount of gold produced at Karma for the life of the Project in exchange for Ongoing Payments. -- The Increase Option is repayable in eight quarterly deliveries totalling up to 30,000 ounces of gold based on the pro-rata portion of the amount drawn thereunder, starting 18 months from when the first tranche of the Increase Option is drawn down.
Having flexibility in Karma's development plan was a critical factor in determining the best project finance package and partner for True Gold. The Company believes strongly in the organic growth potential of the Karma Property and the high likelihood of additional production from the discovery of new resources. As such, True Gold took careful consideration in selecting a project finance package that was cost effective and aligned well with the Company's growth strategy and timeline.
True Gold spent the past year reviewing and negotiating over a dozen term sheets from traditional and alternative funding sources. The Franco-Nevada/Sandstorm funding package demonstrated the strongest solution in terms of cost of capital, operational flexibility, alignment of business interests and long-term partnership benefits, which the Company believes will provide maximum benefits to our shareholders.
The Agreement covers the 856-square-kilometre Karma project area. Supplemental permits for Kao and
DEVELOPMENT HIGHLIGHTS AND PROGRESS UPDATE
In a short period, True Gold has advanced and significantly de-risked the
-- Assembled our development team on-site; -- Constructed the water reservoir, which is currently filled to capacity with 1.3 million m3 of water; -- Ordered and put deposits on the mining fleet for delivery to site in late November/early December; -- Secured Karma exploitation permit; -- Discovered, drilled-off and announced additional inferred resources of 1,662,000 ounces of gold (47.8Mt at 1.08 g/t Au)(2), not included in the Feasibility Study; and -- Completed detailed engineering and construction-level design work.
We are currently negotiating long-term consumables contracts. A scoping study of the North Kao deposit is also underway, in addition to ongoing exploration focused on regional targets and the recently discovered northern extension to the
-- Construction of major mining infrastructure will begin in earnest in
September 2014, and is expected to be completed in Q3, 2015. -- Procurement process is underway, and will continue until Q3, 2015. -- Ore from the Rambo deposit will be placed on the leach pad in Q4, 2015. -- First gold pour is expected by the end of 2015. -- First full year of production expected in 2016, with production of more than 150,000 ounces of gold projected.
CONFERENCE CALL DETAILS
True Gold will host a conference call on
Access to the conference call may be obtained by dialing the following numbers:
Toronto: 416-340-8527 -- Toll-free North America: 800-766-6630 -- Toll-free international: (dial country code) 800-2787-2090 -- International (not toll-free): 416-340-8527
An audio replay of the call will be available after the call by dialing 905-694-9451 (
(1) See Technical Report, entitled "Updated Resource Estimate and Feasibility Study on the
(2) See Technical report, entitled "Updated Resource Estimate on the
About True Gold
Additional information about the Company and its activities may be found on the Company's website at www.truegoldmining.com and under the Company's profile at www.sedar.com.
ON BEHALF OF THE BOARD
All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to True Gold within the meaning of applicable securities laws, including statements with respect to the potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future gold prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resource estimates, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of True Gold and there is no assurance they will prove to be correct.
Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including but not limited to, risks related to the interpretation of results at the
Although True Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. True Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.
FOR FURTHER INFORMATION PLEASE CONTACT:
VancouverOffice: 604-801-5020 email@example.com Investor inquiries: Blaine Monaghan604-801-5020 firstname.lastname@example.org Source: True Gold Mining Inc.