Up to US$300m secured to facilitate development of 3Moz Bau Gold Project

Highlights

• Up to US$300m gold pre-purchase and offtake non-binding drawdown funding facility term sheet signed with major shareholder Quantum Metal Recovery Inc, which Besra believes to be one of the largest deals of its kind signed by an ASX listed junior.
• Post-completion the Facility provides up to a US$300m deposit paid, to be paid over 30 months, against future production ounces, enabling Besra to fully fund production at Bau and the appraisal of other deposits within the Bau goldfield corridor.
• The Facility is expected to remove the need for dilutive equity financing and project/corporate debt encumbering Besra with hedging requirements and/or onerous covenants and is expected to be delivered at up to US$10m/month.
• Subject to the receipt by Besra of the proposed US$10m/month, the Facility is to be settled by way of delivery to Quantum of up to 3moz ounces of gold according to an agreed percentage of production at an agreed floating gold reference price, but subject to a Floor Price.
• Subject to draw-down under the Facility, Besra will be funded to immediately commence an update of the previous feasibility studies with initial results of this work due in the 2H CY23.
• Upon implementation of the pilot plant and futher successful updates to the feasability studies, Besra plans to utilize funds to commence commercial-scale production within 12-18 months.
• Quantum is one of the largest gold distributors in Malaysia.

PERTH,  Australia, March 21, 2023 /PRNewswire/ -- Besra Gold Inc (ASX:BEZ) is very pleased to announce the execution of a non-binding term sheet for the provision of US$300m gold pre-purchase drawdown and offtake funding agreement signed with our major shareholder Quantum Metal Recovery Inc, which upon completion Besra believes to be one of the largest deals of its kind signed by an ASX listed junior. The Facility was negotiated on behalf of the Company by Besra shareholder and advisor, Noblemen Ventures Pty Ltd.

Besra's Chairwoman, Jocelyn Bennett commented:

"This funding would completely alter Besra's trajectory and provides a clear pathway to gold production at the Bau Project.

At a time when access to capital for emerging gold producers is difficult and typically highly dilutive, the Board is very pleased to have removed this impediment to Besra's growth. We now have clear line of sight on commencing production at Bau with our issued capital intact, as well as recourse to little, if any, debt and the restrictive covenants typically required by lenders.

At completion Besra will have immediate access to funding to advance the Bau Project. We plan to commence a refresh of the 2013 feasibility study and accelerate our plans to begin pilot production in calendar year 2023. On the exploration front, we will focus on upgrading the quality of our JORC resource by converting a portion of our Inferred ounces into the Measured & Indicated category.

With Quantum's position as a major shareholder, we have a strong alignment between the Company's funding partner and the interests of shareholders. The Facility clearly endorses the long-term viability of Besra's future in Sarawak, where Quantum already has a firm presence. Quantum continues to demonstrate a clear commitment to support our exploration and development strategies in Sarawak and at Bau."

Quantum's Executive Chairman Dato Lim Khong Soon commented:

"We are most pleased to have entered into the agreement with Besra and play a part in continuing the long tradition of gold mining in the Bau region which goes back just over 200 years. As a major shareholder in the Company, we are excited at the potential of the Bau Project which we anticipate this funding will unlock.

We are particularly attracted to the expertise of Besra's Board and executive team as well as the scale of the gold resource at Bau that they and their in country team of locals are working very hard to commercialise. We are very positive on the outlook for gold and this opportunity to secure a material long term supply of gold for our bullion trading business is very propitious."

Transaction Benefits

Upon completion the Company will have access to the staged funding of US$300m, at a rate of up to US$10m/month, to be used for construction, commissioning and operation of the Bau mine site plant and associated infrastructure, renewal of mining leases, feadibility studies, exploration and mining activities, M&A, gold treasury activities, Besra corporate and working capital purposes.

The Facility is expected to remove the Company's need for dilutive equity financing for project development in particular and the perceived overhang this can cause which often negatively impacts the market's valuation of companies entering the project development stage.

*For further information refer to the ASX announcement dated 21 March 2023^[1] or contact:

Angela EastMedia + Capital Partners +61 428 432 025angela.east@mcpartners.com.au^[2]

References

1. ^{^} refer to the ASX announcement dated 21 March 2023 (www.asx.com.au)
2. ^{^} angela.east@mcpartners.com.au (www.prnasia.com)