Discovery Metals, the ASX/AIM/BSE listed copper exploration outfit, said on Friday the Boseto Copper project finance has received credit approval from the banking syndicate and the project remains on track for commissioning and first production in the first half of 2012.
The first draw down of US$180 million (P1.2 billion) debt package, which has already been approved by the company board, is anticipated in July 2011.
However, the facility is subject to normal conditions precedent for financing arrangements of this nature.
Discovery Metals’ Managing Director, Brad Sampson, said the new cash will allow the project to progress according to the set timelines.
“The progress on the construction at Boseto is pleasing and the availability of the debt finance will allow the construction works to continue in line with our published timetable,” Sampson said.
“Shareholders should gain further confidence that the Boseto project complies with the due diligence requirements of such a well?credentialed debt syndicate,” he added.
The approval of the debt package follows an extensive due diligence process by the banks that include Standard Chartered Bank, Standard Bank, Credit Suisse and Caterpillar Finance as joint lead arrangers.
The funding will be applied to the Boseto processing plant for US$105 million and the mine mobile fleet for US$75 million.
In addition to the US$180 million project and equipment finance, the banking syndicate will provide a US$25 million overrun and working capital facility plus hedging lines for both copper and silver production.
The facility will be secured over the Boseto Copper Project assets and 100 percent of the shares the company owns in the project subsidiary entity (Discovery Copper Botswana
Proprietary Limited).
The Boseto Copper Project is currently under construction and is expected to be commissioned in the first half of 2012.
The company will complete its required equity contribution to the Boseto project by the end of June 2011 and will have in excess of US$70 million in cash reserves at that time.
Discovery Metals has previously said the facility also provides project overrun and hedging facilities and it is subject to completion of the project finance documentation and the usual credit approvals and conditions precedent customary for a financing of this nature.
