8th Jun 2015 10:32
LONDON (Alliance News) - Minera IRL Monday said it has agreed a USD70 million secured finance facility, in what is expected to be the first step toward securing a USD240 million senior project credit finance facility.
The Peruvian mining company said the USD70 million deal is from the state-owned development and promotion bank, Corporación Financiera de Desarrollo SA, and was syndicated through Goldman Sachs Bank US.
The bridge loan is expected to be the first step towards a senior project credit finance facility of up to USD240 million from the state-owned bank to build the company's Ollachea gold project in the Puno region in southern Peru. The USD240 million facility has been agreed under a mandate letter.
The bridge loan will carry London Interbank Offered Rate plus 6.17% interest for a 24 month period and will be repaid using the follow-on senior project credit finance facility. However, it can be repaid any time for a 0.75% fee, it said.
The bridge loan will be used to consolidate debt and to advance the gold project including a "limited" resource expansion drilling campaign. The USD70 million will be used to repay the company's USD30 million bank debt facility with Macquarie Bank, make the final USD15.1 million property payment to Rio Tinto PLC, begin engineering work on the Ollachea processing plant and to fund pre-construction work.
The funds will also be used to conduct further resource drilling at the Minapampa Far East Zone at Ollachea.
Minera expects to seek partners for the project to reduce the amount of debt and leverage on the project to what the company determines to be an "acceptable level", and will include input from the state-owned bank and potential debt and equity providers, it said.
The USD240 million facility is expected to be completed and in place by the end of 2015, and Minera said one or more financial institutions will be invited to participate in the senior project debt facility. The bridge loan has been secured against the Ollachea project and the company's wholly owned subsidiary which owns it.
Minera shares were up 24.7% to 6.23 pence per share Monday morning, one of the best-performing stocks in the AIM All-Share index.
By Joshua Warner; [email protected]; @JoshAlliance
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