Newfield Resources Limited (NWF) subsidiary, Sierra Diamonds Limited (SDL), has entered into a Conditional and Non-Binding Terms Sheet with the Africa Finance Corporation (AFC) for a US$50 million secured debt facility for the Tongo Diamond Mine‘s further development towards commercial production.
AFC is a multilateral financial agency founded in 2007 to serve as a catalyst for private-sector-led infrastructure investment throughout Africa. AFC’s methodology combines specialised sector experience with a focus on financial and technical advisory, project structuring, project development, and risk capital to fulfil Africa’s infrastructure development requirements and achieve sustainable economic growth.
“We are delighted to have signed the Terms Sheet with the AFC, representing a significant milestone for the Company. The due diligence progress preceding this Terms Sheet has been extensive, and we are pleased with the progress made to date. Due diligence is ongoing, led by the AFC and its independent consulting groups concerning technical, financial, environmental and social aspects of the Company and the Tongo Mine development,” NWF Executive Director Karl Smithson said.
Smithson stated that NWF has significantly progressed the Tongo Diamond Mine from exploration to development and first production with its own finance. According to him, the Company believes the proper finance partnership would enable the Tongo Mine to enter full-scale production, resulting in several benefits for all stakeholders, including local residents, the Government of Sierra Leone, and Newfield shareholders.
“Our capable technical team, including recently appointed technical adviser to the Board, Koos Visser, is actively progressing off and on-site due diligence processes with the AFC’s independent advisor groups, and we look forward to providing further updates as we progress,” he added.
NWF indicated that the Tongo Diamond Mine’s operating focus remains on stope mining of the Kundu A segment. The Company will now focus on developing the return airway drive to the west to access the high-grade Kundu B ore deposit at its top end, generating more ore for processing.
NWF hired Z-Star Mineral Resource Consultants to provide an updated estimate of the revenue (US$/carat) of the Kundu and Lando dykes, taking into account updated rough diamond market conditions as well as the results of the first diamond tender, which was concluded in May 2022.
The Company continues to engage with state power supplier EDSA for access to the Tongo Diamond Mine site’s hydroelectric power line. Meetings on the design and agreement of the infrastructure from the hydropower line to the mining site have resumed, which, if successful, would allow the Company and SDL to receive green energy at a lesser cost.
