THE COMPANY which wants to open a molybdenum mine at Kitsault on the north coast of British Columbia says it has secured about one-third of the financing it had originally anticipated from a group of international lenders.
Alloycorp had been working on receiving (US)$612 million from six lenders but now has (US)$225 from two of them and one has now dropped out, the company said in a release this week.
“The remaining three lenders continue to work towards final credit approval, while other new lenders are reviewing their participation in the syndicate,” said the company.
At the same time, the company announced additional equity financing of (US) $140 million and a conditional further equity commitment of (US) $70 million.
The money is being used on pre-construction activity, camp construction and other work at the location.
Alloycorp was once known as Avanti until a name change last year but is keeping the Avanti name as a subsidiary for the project.
While the company works on final financing, it has also been updating project costs.
“Based on work completed to date, initial construction capital appears to be trending higher by 20 per cent to 30 per cent from the $818 million estimate,” said the company.
In anticipation of a construction start this year when its financing is secure, Alloycorp has finished work on a 150-person camp at the location, completed a road to the project site and has finished rebuilding a bridge over the Nass River which is owned by the provincial government.
It has also opened an office in Terrace of three employees which will be the business base for its mine operation expected to employ 300 people.
Molybdenum is a strengthening alloy agent for steel production.
“We are pleased with the progress we have made with our lenders to date. Despite a volatile price environment for molybdenum and resource commodities in general, observed over the past few months, their continued support is a testament to the quality of the Avanti Kitsault asset and its management team,” said Alloycorp president Gordon Bogden in the release.
Alloycorp has received its full environmental and another approvals from the federal, provincial and Nisga’a Lisims governments.