Firestone Diamonds (LON:FDI) has tied up a debt financing package worth more than US$82mln for its Liqhobong mine development in Lesotho.
Absa Bank will provide a project debt finance facility of up to US$82.4 mln to the Liqhobong Mining Development Company (LMDC), which is 75% owned by Firestone and 25% by Lesotho's government.
Initial infrastructure and capital costs for the diamond project are estimated at US$185.4 Mln. The funds from Absa will be used to build Liqhobong's main treatment plant.
The facility will have a total term of 6.5 years, with an 18 month draw down period for construction and with the repayment of capital occurring in the final 4.5 years of the loan term, Firestone said.
Conditions of the facility include approval of both commercial and political risk insurance by an Export Credit Agency and the company raising the balance of capital required to complete the project.
Stuart Brown, Firestone’s newly appointed chief executive, said: "Receipt of Absa Committee approval to provide LMDC with the Facility for the development of the MTP at Liqhobong, is a major step forward on our journey.
In addition, it marks an independent endorsement of Firestone and our project, in what we believe has been one of the most challenging periods that mine funding has encountered in recent years.
“The board confirms that it is evaluating a range of options to fund the balance of capital required to complete the project, which it expects to conclude in the near future."