Aura Minerals Secures $31 Million for Borborema Project Development
Financing Secured for Borborema Gold Project
Aura Minerals Inc. has secured a new financing arrangement for the Borborema gold project in Brazil. Through its subsidiary, Borborema Inc., the company has obtained a total of US$31 million. This financing comprises a US$21 million net smelter return royalty and a US$10 million gold-linked loan provided by Gold Royalty Corp.
Total Funding for Project Construction
With this latest financing, Aura Minerals has now amassed over US$145 million in total, factoring in previous loans and funding agreements. This sum is earmarked for the construction of the Borborema Project, which carries an estimated total capital expenditure of US$188 million.
Key Terms of the Financing Agreement
- NSR Royalty: Under the agreement, Gold Royalty Corp. will receive a 2.0% net smelter return royalty on the first 725,000 ounces produced at Borborema. After this threshold is met, the royalty rate will decrease to 0.5%. Borborema retains the option to repurchase the remaining 0.5% royalty for US$2.5 million.
- Pre-production Payments: Gold Royalty Corp. is set to receive quarterly gold payments of 250 ounces (1,000 ounces annually). These payments will cease either at the start of commercial production or on the tenth anniversary of the transaction.
- ESG Co-Investment Payments: As part of the agreement, Gold Royalty will allocate US$30 per gold equivalent ounce to Borborema for ESG (Environmental, Social, and Governance) investments, capped at US$300,000.
- Gold-Linked Loan: The agreement also includes a US$10 million loan with a 6-year term. This loan features quarterly interest payments in gold and offers an option for prepayment after 24 months, subject to certain conditions.
CEO's Comments on the Transaction
Rodrigo Barbosa, President and CEO of Aura, commented on the conclusion of the financing agreement for Borborema. He noted the company's diversified funding approach, combining debt, royalty, and gold loan elements, as a strategy that aligns with Aura's objective of reducing financial risk and enhancing shareholder value.
