Scandinavia-based Ethiopian gold exploration and boutique mining company Akobo Minerals has signed a mandate letter with an international debt arranger for a contemplated loan of up to $8-million.
The contemplated loan is expected to provide Akobo with sufficient funding to complete its mining development at its Segele project and start production in the first quarter of 2023.
Pursuant to the mandate letter, the intention is to complete all conditions precedent, including a customary due diligence, site visit and agreeing on relevant documentation prior to entering into the final loan agreement.
Further, it is expected that Akobo will grant the lender warrants representing 2% of its equity, with a strike price equal to Akobo’s share price on the mandate letter signing date, where such warrants will vest immediately.
The mandate letter is not a binding loan agreement and there can be no guarantees that a final loan agreement will be entered into and/or that the loan will be funded to Akobo, the company points out.