Avanti closing in on project finances
The company which wants to build a molybdenum mine at Kitsault on the north coast is closing in on the financing it needs for the project.
Avanti Mining has a broad agreement with six international lenders which it hopes will result in loans of (US)$612 million leading to a two-year construction schedule beginning next spring.
Avanti is projecting a total cost of (Canadian) $812 million and expects the rest will be made up of equity financing, finding partners and selling silver that’s also contained in the Kitsault ore body. The agreement with the six lenders, one of which is the Canadian Export Development Bank, is contained in what’s called a mandate letter and the lenders are now examining the project in detail.
“Final credit approval for the [financing] facility is expected in September 2014,” said Avanti president Gordon Bogden in a release.
Each of the lenders is involved based on sales of the mine’s ore or equipment being purchased for operations.
While the Canadian Export Development Bank’s mandate is to assist companies in developing export productions, the Caterpillar Financial Services Corporation involvement will help finance Avanti’s purchase of Caterpillar-constructed equipment for the mine. The Korea Development Bank will lend money based on a sales agreement Avanti has to sell product to a South Korean steel firm.
The remaining three lenders, European UniCredit Bank AG, Japanese Mizuho Bank and European BNP Paribas are participating through a federal German loan guarantee made possible because of an agreement Avanti has to sell its product to the German firm of ThyssenKrupp.
“The Kitsault project moves significantly closer to a positive production decision,” because of the mandate letter, said Bogden.