Announcement of IFC Financing for Major Rehabilitation of Gold Mine in Ghana on May 8, 1985

186 H S- treet N 'v International Finance Corporation 0433 USA FOR RELEASE: Wednesday, May 8, 1985 CONTACT: Monique Amaudry Press Release No. 85/32 (202) 676-9331 IFC FINANCES MAJOR REHABILITATION OF GOLD MINE IN GHANA The International Finance Corporation is providing loans of $55 million to Ashanti Goldfields Corporation (Ghana) Ltd. (AGC) to co-finance a $158 million, five and a half year rehabilitation program with the participation of the Government and foreign partners. "The benefits of the project are substantial, significantly increasing Ghana's export earnings and Government revenues," said Gunter Kreuter, Director of IFC's Department of Investments in West Africa. IFC, which is affiliated with the World Bank, is a specialized development institution which supports commercial enterprises in developing countries by providing long term financing and technical assistance. AGC's rehabilitation program, which will increase gold output by 50% over the next five years, has required a sizeable investment of long term capital. AGC is a joint venture between the Government of Ghana and the British firm Lonrho, with Lonrho providing management. The project will involve two main components: a five and a half year program of shaft sinking and a three year reequipment program to increase mine mechanization and introduce new machinery. A number of processing improvements will also be introduced at the treatment plant and a tailings plant will be added to retreat old tailings that show relatively high gold assays. IFC is making a $45 million loan to AGC, including $22.5 million for its own account and $22.5 million for the account of participating commercial banks, including Standard Chartered Bank and Union Bank of Switzerland as lead banks, Manufacturers Hanover Trust Company of New York, Banque Nationale de Paris and Handelsbank N.W. of Zurich. --2 -2- In addition, IFC is making a standby loan of $10 million to AGC of which $5 million is for its own account and $2.5 million each for the accounts of Standard Chartered Bank and Union Bank of Switzerland. AGC is an important factor in the Ghanaian economy, currently accounting for 18% of exports and, with over 9,000 employees, is the nation's largest employer. The rehabilitation of AGC is of high economic priority for Ghana and will lend support to the government in its economic recovery program. The project is IFC's first in Ghana and IFC played a key role in assisting the Company in structuring the project and in attracting the participation of commercial banks in a major joint venture investment.