Gold and exploration company Namib Minerals’ subsidiary Bulawayo Mining Company has signed a nonbinding term sheet with Ecobank Zimbabwe for a proposed nondilutive $30-million, 36-month loan facility to support the Redwing gold mine’s resource definition and bankability programme.

Namib explains that the proposed facility remains subject to completion of the customary conditions precedent and the execution of definitive documentation.

Upon completion of the definitive documentation and satisfaction of the customary conditions precedent, on the proposed terms, the proposed facility, together with previously secured funding allocated to the programme, is expected to provide the funding required to complete Step 3 of the company’s development timelines and milestones, based on the programme’s current scope and budget.

Step 3 focuses on resource definition and establishing the bankability of the Redwing mine.

Step 3 had been partly funded by the $6.5-million non-dilutive term loan facility previously secured from the African Banking Corporation of Zimbabwe.

Under the term sheet, the proposed facility would finance hoist-related expenditures, expansion and maintenance of the milling plant, drilling equipment, mine development and further exploration drilling to increase the mine’s resource base.

Namib says resource definition and bankability are key milestones in assessing the potential to develop the mine into a larger-scale gold operation. Completion of this programme will inform the proposed development’s scale, capital requirements and construction plan and support the company’s investment decision.

The term sheet also contemplates Ecobank and Ecobank Group acting as lead arranger and underwriter for financing the construction phase of Redwing’s proposed larger-scale development, following completion of the definitive feasibility study (DFS) and subject to further conditions and arrangements.

“Ecobank’s continued support of the company further reflects confidence in our resources and operating record.

“If completed on the proposed terms, this facility would, subject to the results of the DFS and negotiation of definitive documentation, complete the funding package for Redwing’s resource definition and bankability programme. Our focus is on delivering this programme and establishing the basis for a disciplined construction decision,” says Namib CFO Sphe Mchunu.