Asante Gold Corporation has announced the signing of a $500 million Gold Forward Purchase Agreement with Fujairah Holdings LLC.
This strategic move, facilitated through its subsidiary Asante Gold Bibiani Ltd., positions the company to bolster activities at its Bibiani Gold Mine in Ghana’s Western North Region.
The agreement will provide $100 million in revolving financing over approximately two years. In a statement copied to the Ghana Stock Exchange, the President and CEO of Asante, Dave Anthony described the partnership as transformative for the company’s operations.
“We are pleased to announce this Gold Forward Agreement with Fujairah, a strategic and foundational partner for Asante. This Agreement will enable us to immediately accelerate the ramp-up of mining activities and completion of the sulphide treatment plant. We plan to increase gold production beyond 15,000 ounces per month at Bibiani by mid-year, while we work to complete our other funding initiatives,” Mr Anthony said.
What is a Gold Forward Agreement?
A forward agreement is a financial contract between two parties to buy or sell an asset at a predetermined price on a future date. In the case of Asante’s Gold Forward Agreement, the company has agreed to deliver refined gold to Fujairah Holdings LLC in exchange for an upfront payment of $500 million over a two-year period.
Fujairah will make an initial deposit of $100 million, which will be repaid in gold deliveries valued at the same amount, starting in March 2025. These deliveries will be priced at a 7% discount to the prevailing market price of gold at the time. The remaining $400 million will follow in instalments, with gold deliveries structured similarly.
This arrangement provides Asante with immediate liquidity to accelerate its mining operations and infrastructure development while ensuring a steady flow of gold deliveries to Fujairah over the contract period.
Details of the agreement
Proceeds from the agreement will primarily fund the accelerated ramp-up of mining operations and the completion of a sulphide treatment plant at the Bibiani mine.
Asante Bibiani’s obligations under the agreement are secured by a parent guarantee and a debenture against its assets. Fujairah has agreed to a subordinated position relative to senior lenders and bondholders, pending the finalisation of an intercreditor agreement related to a broader financing package announced by Asante in October 2024.