Besra Gold‘s (ASX:BEZ, TSE:BEZ) board has approved a US$14.25 million subscription agreement from Victory Corporation Group (VCG) that includes a gold sale agreement.
Proceeds will be used to repay outstanding interest under its convertible and gold-linked notes, effect the capital investment necessary to restore production at its two Vietnamese mines to normalised levels.
The investment clearly demonstrates VCG's belief in the long term demand for gold and recognition of Besra's potential.
VCG will hold a 40% stake in the company, making it the largest shareholder with the right to appoint two members to Besra’s board.
Besra had earlier this month re-opened its Bong Mieu mine in central Vietnam.
Bong Mieu and Phuoc Son had produced about 60,000 ounces of gold in 2013 before severe weather in November caused major disruption at Phuoc Son and complete suspension of operations at Bong Mieu.
The company had in March released an updated Feasibility Study that improves the economics of Stage 1 of its Bau Gold Project in East Malaysia.
This has all-in sustaining costs of $973.14 per ounce, NPV of $91.4 million and IRR of 38%. Capital cost is $134.9 million.
While more than 3 million ounces of gold have been mined at Bau, previous operations have not exceeded 60 metres below surface and no exploration or mining has been done at depth.
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