Cora Gold Limited (CORA.L) Term Sheet for Sanankoro Gold Project

US$25m Term Sheet for the Construction of Sanankoro Gold Project, Mali

Cora Gold Limited, the West African focused gold company, is pleased to announce that it has signed a new US$25m Mandate and Term Sheet (the “Term Sheet”) with investment firm, Lionhead Capital Advisors Proprietary Limited (‘Lionhead’), to fund the future development of Cora’s flagship Sanankoro Gold Project (‘Sanankoro’ or ‘the Project’) in Southern Mali (the ‘Project Financing’). This is conditional on, among other matters, the completion of a Definitive Feasibility Study (‘DFS’) on the Project before the end of June 2022. This new Term Sheet replaces the previous one with Lionhead, which was announced on 18 June 2020 and was for US$21m.

Highlights

● US$25m Term Sheet to finance the development of Sanankoro on completion of a positive DFS

○ US$12.5m Equity Financing

○ US$12.5m Convertible Financing

● Term Sheet requires Cora to deliver a DFS before the end of H1 2022 with minimum key objectives (together the ‘Project Milestone’) including:

○ 35% Internal rate of Return (‘IRR’) based on a US$1,500/ oz gold price; and

○ 8 years mine life and production of 40,000 ozs/year, or equivalent production over a different time period and delivering the minimum IRR threshold, in a US$1,700/oz gold price pit shell

● Updated Mineral Resources Estimate on target for Q4 2021 and completed DFS targeted for H1 2022

● Lionhead prepared to syndicate +30% of the Term Sheet on the same terms with other investors

Bert Monro, CEO of Cora, commented, “The updated Term Sheet with Lionhead is a fantastic demonstration of their support for Cora and importantly, further de-risks the Sanankoro Gold Project. With an increased focus on a CIL processing route to enable the development of a larger and longer life gold mine with better economics, there is an expectation of a larger capex than the January 2020 heap leach scoping study. In light of this, the increased equity and convertible commitment in this Term Sheet gives great support to the Company and significantly de-risks future project financing as we move towards an updated resource estimate and DFS completion.”

Bert Monro CEO of Cora Gold Limited (CORA.L) Interview with Karl West

Term Sheet Details:

Lionhead is acting as lead investor and arranger on behalf of a consortium of investors including the founders of LionOre Mining International Ltd (which was bought by Norilsk Nickel for US$6.3bn in 2007), as well as the initial investors in Mantra Resources Limited (which was bought by ROSATOM for AUD$1.2bn in 2010). Paul Quirk, a non-executive director of Cora, is a founding partner and director of Lionhead. The Quirk Family are potential beneficiaries of trusts that own 34.55% of Cora through Brookstone Business Inc and Key Ventures Holding Ltd.

The Term Sheet envisages:

● Equity Financing: US$12.5m subscription for new ordinary shares of no par value each in Cora at the lower of (i) an 10% discount to the 30-day volume weighted average price (‘VWAP’) at the date that Cora announces achievement of the Project Milestone and (ii) the lowest price at which Cora has issued new ordinary shares in the 60 days prior to the date that Cora announces achievement of the Project Milestone (the ‘Equity Financing’)

● Convertible Financing: US$12.5m investment in a Convertible Loan Note:

○ Coupon: 8% per annum.

○ Conversion: The total amount outstanding under the Convertible Loan Note (including interest) shall be converted, at the election of Lionhead at any time prior to the 5th anniversary of the issue of the Convertible Loan Note, into ordinary shares in Cora at the lower of (i) a 30% premium to the 30-day VWAP at the time of the Equity Financing or (ii) the 30-day VWAP at the time of conversion.

○ Net Smelter Return Royalty (‘NSR’): 1% until 250,000 ozs of gold have been produced from the Project. Cora may purchase and terminate the NSR at any time for US$3m payment.

○ Repayment: Repayable on the fifth anniversary of advance date if not converted, or earlier, at the option of the holder, in the case of: (i) a change of control of Cora; or (ii) the merger or sale of Cora (including the sale of substantially all of the assets of the Company) at a 30% premium to the total amount outstanding under the Convertible Loan Note.

Lionhead acknowledges that Cora intends to undertake private placements to enable existing shareholders to subscribe +US$3.75m in the Equity Financing and +US$3.75m in the Convertible Financing such that Lionhead’s participation in the Project Financing may be reduced by such amounts.

A fee equal to 3% on up to US$25 million Project Financing shall be paid by the Company to Lionhead on receipt of the proceeds in respect of the Equity Financing and Convertible Financing by Lionhead.

Related Party Transaction

The entry into the Term Sheet is deemed to constitute a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. Cora’s independent directors for this purpose (being all those save for Paul Quirk) consider, having consulted with the Company’s nominated adviser, that the terms of the Term Sheet are fair and reasonable insofar as the Company’s shareholders are concerned.

Further Details

The Company is developing the Sanankoro Gold Project in Southern Mali where SRK has a target of between 1-2Moz gold to a vertical depth of 100m and an initial Scoping Study on the Project has indicated a 107% IRR and Annual Free Cash Flow of US$24m at a gold price of US$1,500/oz.

The Company is now focused on resource growth and upgrading of existing Inferred resources to Measured & Indicated at the Project ahead of developing a standalone mine. To this end, it is undertaking a +35,000m drilling programme, which is its largest single drill programme ever undertaken and is expected for completion in September 2021. Top drill results from the 2021 programme include:

Market Abuse Regulation (‘MAR’) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, until the release of this announcement.

Notes

Cora is a gold company focused on two world class gold regions in Mali and Senegal in West Africa. Historical exploration has resulted in the highly prospective Sanankoro Gold Discovery, in addition to multiple, high potential, drill ready gold targets within its broader portfolio. Cora’s primary focus is on further developing Sanankoro in the Yanfolila Gold Belt (Southern Mali), which Cora believes has the potential for a standalone mine development. Cora’s highly experienced management team has a proven track record in making multi-million-ounce gold discoveries, which have been developed into operating mines.


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