Roxgold CEO John Dorward told Gold Investing News that Credit Suisse's departure wasn't unexpected given the firm's decision to exit the commodities space. He believes a new backer for Yaramoko will be found in the first quarter of 2015.
Despite the recent departure of Credit Suisse (NYSE:CS) as a backer for Roxgold's (TSXV:ROG) Yaramoko project, CEO John Dorward said it's "business as usual" for the company and remains confident of finding a new backer in the first quarter of 2015. Credit Suisse and Societe Generale (EPA:GLE) signed a deal on September 25 to help finance the project, pledging to contribute $37.5 million apiece, but on Monday Roxgold confirmed Credit Suisse has pulled out, leaving a multimillion-dollar hole for the company to fill. The firm's decision follows political turmoil in Burkina Faso caused by longtime president Blaise Compaore's deposition in a military coup. Though the West African country is a large player in the mining industry, and is ranked as the fourth-largest gold producer on the continent, the unrest has caused concerns about the future of Yaramoko. But despite losing one of the project's largest backers, Dorward is upbeat. "It's certainly inconvenient. I wouldn't say I'm concerned. The intentions of Credit Suisse on a broader level have been well flagged," he said, alluding to Credit Suisse's announcement six months ago that it will be pulling out of the commodities market. "We got caught to some extent as part of the bigger game." He admitted that the unrest in Burkina Faso probably didn't help, but believes it wasn't a driving reason behind Credit Suisse's exit. The current deal with Societe Generale does not include political risk insurance, but Dorward said Roxgold has been told by several companies that the insurance is available if needed. Societe Generale is now approaching several parties about project financing, and has rolled its commitment over until February. Dorward said he expects the bank to extend it further if, for example, final paperwork with a new partner isn't completed by then.