CDB provides $217 million loan for Gold Ore Processing Facility Construction Project

On June 4, 2021, the Development Bank of Kazakhstan (DBZ) and China Development Bank CDB) signed a $217 million loan agreement for a Gold Ore Processing Facility Construction Project. This loan was issued as a subsidiary loan under a larger facility (or framework) agreement that had previously been signed by the two banks. DBZ then on-lent the proceeds of the loan to two special purpose vehicles (project companies) called RG Processing Limited Liability Partnership (RG Processing LLP or (РГ ПРОЦЕССИНГ) and RG Gold Limited Liability Partnership (RG Gold LLP). The borrowing terms of the loan are as follows: 9-year maturity (final maturity date: June 4, 2030) and an interest rate of 6-month LIBOR plus a 4.1% margin. In December 2021, DBK drew down a first tranche of $56.5 million under the facility agreement. As of December 31, 2021, the aggregate principal amount outstanding under this facility agreement was $56.5 million. The purpose of the project is to construct a carbon-in-pulp (CIP) plant that is expected to start processing 5 Mtpa of sulfide ore by Q3 2022. More specifically, the $425 million project will involve the construction of an 80 M m3 tailings storage facility, a new rotation camp, water supply facilities, a new high-voltage electricity transmission line, maintenance and repair shops, field mining equipment technical support facilities, warehouses and a petrol station. A high-voltage power line 220 kV with a length of 70 km, will connect the Makinskaya (Макинская) electric power substation (Bulandynskiy District) with the Raygorodok production area and which will enable to provide the future CIP plant with adequate power supply. A network of water conduits with a total length of approximately 30 km will supply processed water to the future CIP plant. Upon completion, the future CIP plant will send bullion to the Kazzinc refinery, which operates one of the largest gold-producing operations in Kazakhstan, Altyntau Kokshetau in the Akmola Region. AAEngineering Group is the EPC contractor responsible for project implementation.

Additional details

1. This project is also known as the “Construction and Operation of Primary Gold-Bearing Ores Processing Facility with Annual Capacity of 5 Million Tons” investment project. 2. RG Gold, which was previously known as Raygorodok LLP, is a Kazakh gold mining and production company operating on one of the largest deposits of gold and third largest in terms of gold resources in Kazakhstan. The deposit is in the Burabay area of Akmola region, covering an area of 67.7 sq. km that consists of two pits: North and South. RG Processing, RG Gold’s sister company, is engaged in the realization of a large-scale construction project of a primary gold ore processing complex in the Akmola Region with an annual capacity of 5.0 M tons of ore. 3. The $217 million loan from CDB is part of a larger, $300 million loan from Development Bank of Kazakhstan (DBZ) to RG Processing Limited Liability Partnership (RG Processing LLP or (РГ ПРОЦЕССИНГ)) and RG Gold Limited Liability Partnership (RG Gold LLP). 4. The all-in interest rate was estimated by adding 4.1% to the average 6-month LIBOR rate in June 2021 (0.160%).

Number of official sources

6

Number of total sources

10