UK-headquartered gold offtake company SigraFi said Thursday it has secured a $35 million credit facility to finance gold supply.
The facility is provided by a consortium of British and UAE investors led by UAE-based Ronin Commercial Brokers LLC and provides SigraFi with the capital to expand current operations with its contracted suppliers in the DRC, Zambia and South America, and to contract new cooperatives and aggregators.
SigraFi purchases gold under multi-year contracts from organised artisanal and small-scale gold mining (ASGM) cooperatives and is partnered with PeaceGold in the eastern DRC, working with 11 cooperatives representing 25,000 miners in Ituri Province.
PeaceGold was established in 2013 with the local nonprofit Conflict Resolution Center to help formalize artisanal mining and reintegrate former combatants into regulated work, including gold mining, as a way to reduce conflict.
Under the agreement, PeaceGold acts as an aggregator and export partner for its participating cooperatives, while SigraFi provides guaranteed offtake agreements at competitive pricing, giving cooperatives a greater share of the value of their gold.
The golden gap
Global mined gold production is likely to plateau over the next few years, according to the World Gold Council, while ASGM already accounts for at least 20% of newly mined gold. Its organised producers are held back by a lack of compliance capability and remain cut off from the capital, export corridors and offtakers that serve the rest of the industry. SigraFi was founded to help close this ‘Golden Gap’, it said.
“Artisanal miners produce one in every five ounces of new gold, yet most are shut out of the formal market, without the capital, compliance support or buyers that the rest of the industry takes for granted,” SigraFi executive chairman Stefan Allesch-Taylor said in a news release.
“That leaves the door open to illicit buyers and exploitative practices. This facility empowers cooperatives that have done the hard work of organising, and gives them a direct, traceable route to the world gold market,” Allesch-Taylor said. “We have moved fast because the demand is there on both sides: cooperatives want a legitimate route to market, and refiners want traceable supply.”