Teranga Gold has secured a $165m debt financing commitment from Taurus Funds Management to fund the development of the Wahgnion gold project in Burkina Faso.

The amount will be provided at an interest rate of 8.75% per annum and is payable quarterly in arrears.

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A portion of the funding is anticipated to be used to repay all of Teranga’s current outstanding bank debt.

Taurus is set to receive 2,000,000 unlisted four-year warrants to acquire common shares in Teranga once the debt financing facility agreement has been implemented.

“We are very pleased to be partnering with Taurus to deliver on our vision of becoming the next multi-asset, mid-tier gold producer in West Africa.”

Teranga Gold president and CEO Richard Young said: “We are very pleased to be partnering with Taurus to deliver on our vision of becoming the next multi-asset, mid-tier gold producer in West Africa.

“Together with our cash-on-hand and free cash flows from our flagship Sabodala mine, we expect to have sufficient financial resources to bring Wahgnion, our second gold mine, into production and continue to advance Golden Hill through feasibility.”

Teranga began initial construction at Wahgnion in the third quarter of 2017 through an early works programme.

The company is currently slated to begin mill construction in the second quarter of this year.

Teranga expects to increase its annualised gold production by 50% to between 300,000oz and 350,000oz once production begins at Wahgnion by the end of 2019.

Furthermore, the company has secured an additional $25m to fund a future feasibility study for the Golden Hill project, which is also located in Burkina Faso.

Golden Hill comprises five advanced prospects along with multiple high-grade, near-surface gold intercepts.

The company aims to undertake initial resource estimation for the most advanced prospects at the end of this year.