BRITISH COLUMBIA – Toronto's Avanti Mining has arranged to borrow US$612 million for development of the Kitsault molybdenum mine 140 km northeast of Prince Rupert. The funds will be provided by a syndicate of lenders including BNP Paribas, Caterpillar Financial Services, Export Development Canada, Korea Development Bank, Mizuho Bank, and UniCredit Bank. Final approval of the deal is expected in September 2014.
The facility set out in the term sheet is comprised of US$500 million senior debt for a term of 10.5 years, US$42 million in equipment finance for a term of five years and $70 million in the form of standby cost overrun facilities for a term of eight years. The interest rate is LIBOR-based, loan repayments are semi-annual or quarterly (for equipment finance) and there are mandatory prepayment provisions of a portion of excess free cash flow.
The Kitsault moly mine previously operated between 1968 and 1972 and again in 1981 and 1982. During that time about 30 million lb of molybdenum was produced. The current estimate contains a measured and indicated resource of 321.8 million tonnes grading 0.071% Mo, containing 505.5 million lb of molybdenum, and an additional inferred resource of 317.6 million tonnes grading 0.041% Mo, containing 286.3 million lb of molybdenum.
Avanti intends to establish a single open pit to be mined in four phases with a fleet of trucks, shovels and loaders. Construction and pre-stripping will take 15 months. A 40,000-t/d flotation mill will be built with produce a molybdenum concentrate that will be shipped to Chile for further processing. A saleable silver concentrate will be recovered from the moly tailings. The new tailings management facility will initially contain 233 million tonnes of tails, but provision has been made to expand it to 300 million tonnes if the project were to grow.
The feasibility report is available on SEDAR. Or visit AvantiMining.com.
The interest rate is “LIBOR-based”. I wonder how many points OVER LIBOR it actually is?