www.findersresources.com
Finders is an emerging low cost copper cathode producer, developing a high grade 25,000 tpa copper mine on Wetar Island in Indonesia, plus a highly prospective, advanced gold-silver exploration project in Sumatra.
UPDATE: Finders Resources hires banks to arrange US$138mln project finance for Wetar copper mine
Adds broker comments....
Finders Resources (ASX:FND) said yesterday it had hired a group of banks to arrange a US$138 million project financing deal to bring the Wetar copper project into commercial production.
Last month the company completed a bankable feasibility, which confirmed that the Indonesian copper project has robust economic viability and gave it a value of US$304 million.
It revealed that Barclays Capital, Credit Suisse and Standard Bank have been appointed mandated lead arrangers (MLAs) for loan facilities totalling US$138 million.
They will provide a US$103 million loan facility to fund construction, a US$20 million cost-overrun facility will be put in place to cover unforeseen increases in project costs.
Another US$15 million will be made available to cover working capital requirements, like short-term tax obligations.
“After the successful demonstration stage leading to a positive BFS result, Finders is on the brink of realising our goal of commercial production,” said managing director Chris Farmer.
“This appointment builds on momentum gained by the recent granting of the key mining and processing permits and the release of the Bankable Feasibility Study in June.”
“Standard Bank, Credit Suisse AG and Barclays Capital were appointed after an extensive selection process and are proven partners for mining projects around the world, particularly in Indonesia. The calibre of the banks supporting the project is a reflection of Wetar’s sound economic credentials. We are looking forward to a successful relationship.”
Finders said it expects to get clearance for the financing package by September.
Broker FinnCap welcomed news of the financing. "We interpret this agreement as a strong endorsement of the Wetar project, given the level of due diligence that will have already been completed to get to this stage," said analyst Martin Potts in a note.
"The package represents a 67:34 debt to equity ratio, which is a good result considering the relatively weak markets. Finders will need to find US$52million to complete the project financing and presumably a little extra to cover the corporate overhead and other planned work," he added.
The broker also highlighted that the one outstanding item is the need for the Indonesian Government to complete the forestry re-zoning. This will convert the great majority of the proposed mine site from conversion forest to open ground.
This is a requirement before construction can commence. The process is currently on hold for Ramadan but is expected to be completed no later than December 2011.
"The current ‘best guess’ is that it will be completed in late September or October," added the broker.
