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Bea Mountain Mining Corp. signs heavy mining equipment agreement with Mapa

Published by , Assistant Editor
Global Mining Review,

Bea Mountain Mining Corp. (BMMC), a subsidiary of Avesoro Resources Inc., the TSX- and AIM-listed West African gold producer, has entered into further equipment finance facility agreements (Finance Agreements) with Mapa Insaatve Ticaret A.S. (Mapa), a related party of the company, to facilitate the purchase of heavy mining equipment (HME) and additional auxiliary equipment totalling approximately US$17.1 million.

Equipment to be purchased

The finance agreements worth approximately US$17.1 million, relate to the purchase of three Sandvik DP1500 surface drills, three Komatsu PC1250 excavators, eight Komatsu HD785 haul trucks, and additional auxiliary support equipment including a Komatsu GD655 grader, two Komatsu D275A dozers and two Bomag BW213 drum rollers. Delivery to New Liberty is expected to occur throughout the remainder of 2017 and early in 1Q18.

The Finance Agreements also include the purchase of eight MTU Onsite Energy 2290 kVA diesel generators, purchased to replace the existing rented power generation facility on site at New Liberty, allowing the generation of power to be brought in-house as a part of management’s commitment to reduce on-going operating costs.The loan principal of these agreements includes a mark-up of 2.5% over the cost incurred by Mapa in procuring the equipment.

Financing terms

The equipment finance loans under each of the finance agreements are unsecured, with interest charged at 6.5% per annum on the US$ denominated loan amount of approximately US$7.3 million and 5.5% per annum on the Euro denominated loan amount of approximately €8.3 million (equivalent to approximately US$9.8 million). The loans are repayable in cash in eight equal semi-annual instalments, the first of which will fall due six months after utilisation of the loan.

Opinion of the Independent Directors

Having consulted with the company’s nominated advisor, the independent directors of the company, consisting of David Netherway, Jean-Guy Martin and Loudon Owen consider the terms of this transaction to be fair and reasonable insofar as its shareholders are concerned.


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