The Lagoa Salgada polymetallic project, part-owned by Mineral & Financial Investments Ltd (AIM:MAFL) (MAFL) investee Redcorp, is set to advance as Banco Santander (LSE:BNC) has now been appointed to secure project financing.
MAFL holds a 20% carried interest in Redcorp, a vehicle 80% owned by Ascendant Resource, which is developing the project.
Redcorp has hired Santander as mandated lead arranger (MLA) for a project financing of up to US$158 million which would be sufficient to cover 70% of the project’s capital need. The project is also expected to be supported by the UK Export Credit Agency.
This support is expected to result in more favourable financial terms, as it is anticipated to give political and commercial guarantees to the project lenders, and effectively reduces the risk profile of the project.
Today’s announcement comes with the usual cursory caveats including that financing terms are currently indicative and securing the financing will be subject to credit and other approvals, meanwhile, it would also be conditional upon the securing of construction permits and due diligence, amongst other requirements.
Nonetheless, MAFL in the statement commented that “the appointment of Santander as MLA is a significant milestone for the project financing of the Lagoa Salgada Project".
“At Lagoa Salgada, work continues to advance the permitting over the coming months.
“Redcorp and Ascendant are preparing the issuance of its 43-101 Feasibility Study for the Lagoa Salgada project and once completed will commence comprising of a formal due diligence period before an anticipated final binding offer and documentation.”