Discovery Metals Limited said it has mandated leading banking houses to provide the debt finance that will be used towards the development of Boseto Copper Project in the north-west part of Botswana.
The Botswana Stock Exchange (BSE) quoted mining outfit will use the US$180 million (about P1.2 billion) debt facility towards the completion of processing facilities, construction and purchase of the mobile mining fleet.
DML Managing Director, Brad Sampson, told shareholders the securing of the project debt finance facility for the Boseto copper project marks the completion of the external requirements for the company to transition from explorer to copper and silver producer.
“The project execution is in our hands and we remain confident of continuing to meet our project and corporate milestones,” Sampson said.
“We appreciate the support that the company, the country of Botswana and the copper and silver commodities have received from our shareholders. It is also a pleasure to see the support from our banking syndicate,” he added.
Discovery said the debt syndicate comprises Standard Chartered Bank, Standard Bank and Credit Suisse as lead arrangers.
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.
This debt finance facility provides the remaining funding required to complete the 100 percent Discovery Metals owned Boseto copper project in Botswana following the company’s successful A$138 million equity placement and rights issue in late 2010.
The company has revealed that by the end of December 2010, it held US$161.7 million in cash.
The Boseto copper project is currently under construction and is expected to be completed and commissioned in the first half of 2012.
Funding will be applied to the Boseto processing plant for US$105 million and the Boseto mine mobile fleet for US$75 million.
In addition to 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 incorporation of all debt facilities into one facility simplifies the documentation and security arrangements significantly.
The facility will be secured over the Boseto copper project assets and 100 percent of the shares the Company owns in the project entity (Discovery Copper Botswana Proprietary Limited).
Discovery Metals has prospecting licenses covering 9,656 km2 along the Kgalagadi Copperbelt.