Samsung pumps $20m into Cluff Gold Cluff Gold, the London-listed gold miner, has agreed a $20m investment deal with Samsung C&T, as turbulent equity markets and the restrictions required by project funding force junior miners to seek evermore creative solutions for financing projects. Cluff, which already has one producing mine in Burkina Faso, will receive $20m from Samsung, paying 2.5 percentage points over the benchmark lending rate, in return for selling gold to the construction and trading arm of the Korean conglomerate at a discount to market prices. Samsung will buy 1,929 ounces of gold a month from Cluff at a 2.25 per cent discount to the London benchmark price. Crucially, for Cluff, the deal does not require the miner to put hedges in place against movements in the gold price. Pete Gardner, finance director of Cluff, said that $10m of the funds would be used as part of bringing its Sega mine in Burkina Faso, adjoining Cluff's existing Kalsaka operation, into production next year while the remainder would bolster the company's balance sheet. "I have to ensure the balance sheet has robustness and strength," said Mr Gardner, arguing that the company's favourable outlook for the gold price meant that it wanted to avoid having to hedge the price of its output. If the gold price rises, both Cluff and Samsung would benefit. If the gold price falls however, the effective cost of Cluff's financing from the Korean company would also drop, as the value of Samsung's discount to the gold price declines. Cluff's overall cost of capital in the deal is about 10 per cent at current gold prices, said Mr Gardner, which compares favourably with rates in the high yield bond market. Cluff is on track to produce 60,000-70,000 ounces of gold this year from Kalsaka, with Sega forecast to start producing next year. Shares in Cluff Gold rose 4.26 per cent to 79.5p. Samsung and Cluff also agreed a framework for a possible future investment in the miner's Baomahun project in Sierra Leone. The Baomahun project is an earlier stage gold mine, which has 2.1m ounces of possible resources, that will require as much as $200m in investment to develop, of which $100-120m could be debt financing. Cluff on Wednesday said that the agreement did not include an exclusivity agreement with Samsung and that it continued to talk to other lenders about Baomahun.