- West African gold producer Avesoro Resources has received approval of a revised term sheet from the credit committees of Nedbank and FirstRand Bank, acting through its Rand Merchant Bank division.

The revisions include improved conditions and rescheduled repayment terms of its existing project finance facilities with the lenders in exchange for the provision of a personal guarantee from Avesoro's non-executive chairman Mehmet Nazif Gunal and a corporate guarantee from Avesoro Holdings, the beneficial owner of 73.5% of the company's issued equity.


- Rescheduled repayment structure agreed with no further capital repayments due until 31 March 2018, allowing the company to generate a prudent level of cash reserves before repayments commence, with the repayments scheduled to reflect the current life of mine production profile of the New Liberty Gold Mine

- Senior facility loan tenor extended by two years until 31 January 2022, while the tenor on the subordinated facility has been extended to the earlier of 12 months following the repayment of the senior facility or 31 January 2023

- The senior facility interest rate remains at US$ London Interbank Offered Rate plus 1.8% until 2020, following which it will increase to LIBOR plus 4.3% and the subordinated facility interest rate remains the same at LIBOR plus 7.5%

- Removal of the cash sweep mechanism that obliged the company to use surplus cash generated by New Liberty to accelerate loan repayments, thereby allowing surplus cash generated to now be spent on value enhancing activities including project expansion and exploration

- Removal of the majority of the financial covenants and distribution tests, increasing operating flexibility and reducing the company's administrative burden and monitoring costs associated with the facilities

Chief executive Serhan Umurhan said: "We are pleased to have successfully concluded negotiations with our lending banks and importantly on improved terms.

"This represents a positive conclusion to negotiations between the company and its Lenders which have benefited from assistance provided by Endeavour Financial who have acted as financial advisers to the company in respect of this matter.

"The agreement provides stability for management to build on the material progress made since the initial investment by Avesoro Holdings in the Company during June 2016."

At 9:37am: [LON:ASO] Avesoro Resources Inc. Com Shs Npv Di share price was 0p at 1.95p

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