Amara Sees Samsung Funding Majority of Sierra Leone Gold Mine

Amara Mining Plc said it expects Samsung C&T Corp. to provide the “majority” of the funding it needs to build a gold mine in Sierra Leone.

Amara, previously called Cluff Gold Plc, signed an agreement in 2012 with the South Korean trading and construction company to fund the development of other projects and said it could extend the deal to help finance the Baomahun mine. Chairman John McGloin said any deal would be on “similar terms” to the initial loan with Amara delivering gold to Samsung at a discount to the spot price.

“We’ve already begun those talks with Samsung,” McGloin said in an interview yesterday. “This should meet their hurdle rate, and depending on what their attitude to gold is at the moment, I think they’re absolutely still there.”

Amara said yesterday it’s seeking to raise $151 million to develop Baomahun. The company expects the mine to produce an average 148,550 ounces of gold a year over the first six years with cash costs of about $799 an ounce.

Min Byeong Hoon, a Seoul-based spokesman for Samsung C&T, declined to comment.

McGloin said Amara is talking to other investors to secure the funding shortfall and that it had also spoken to Samsung in the past about taking stakes in individual projects.

“We will start talking to our current investors and potential new strategic investors to come in at the project level or at the corporate level,” McGloin said. “What we’re not comfortable with doing is rushing blindly out to the market and diluting everybody down.”

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