One of a series of new and alternative finance structures Norton Rose Fulbright has advised on in relation to the development of mining projects

Global legal practice Norton Rose Fulbright has advised Asanko Gold, the Vancouver-based mining company, on the US$320 million development financing of the Esaase Gold Project, located on the Asankrangwa gold belt in Ghana, West Africa.

Norton Rose Fulbright advised on all aspects of the loan agreement, signed with Red Kite Mine Finance and comprising a $130 million term loan facility and a $20 million cost overrun facility, with the remaining project costs funded through equity. The transaction marks Red Kite’s first direct investment into Africa, and is an example of the alternative financing structures available to junior mining companies in place of traditional bank-led project finance.

In addition to the loan agreement, Norton Rose Fulbright also advised Asanko Gold on an offtake agreement signed with Red Kite, under which Asanko Gold will sell gold from the Esaase Project for the life of the mine to Red Kite.

Martin McCann, global head of infrastructure, mining and commodities, Norton Rose Fulbright, who led the team, commented:

“Junior exploration companies have been struggling to secure traditional forms of funding for their projects so the fact that Asanko Gold has been successful in securing finance through an alternative financing structure is very encouraging.”

“We are pleased to have advised Asanko Gold, a new client for our practice, on this agreement, which will support the company in fulfilling its goal to become a low-cost, mid-tier gold producer.”

Of counsel Oliver Carruthers and associates Daniel Giemajner and Arundhati Pal also advised Asanko Gold. The loan agreement and offtake agreement were signed on 23 October.

This transaction is one of a series of new and alternative financing arrangements Norton Rose Fulbright’s mining practice has advised on to address the absence of traditional forms of financing, including acting for Tizir Limited on the issuance of a US$150 million Nordic Bond to part fund the construction of its mineral sands mining facility in Senegal. Norton Rose Fulbright has also recently advised on a number of streaming and tolling transactions, offering further options for mining companies to access liquidity in a market where traditional financing may not otherwise be available.

In June 2013 Norton Rose Fulbright was named Mining Law Firm of the Year in the Who’s Who Legal Awards for a second consecutive year. Its global mining practice is world leading, ranked in Tier 1 by leading legal directory Chambers Global 2013.