Exco Resources Limited (ASX:EXS) Financing Arrangements Completed For White Dam Gold Project
Perth, Sep 11, 2009 AEST (ABN Newswire) - Exco Resources Limited (ASX:EXS)(PINK:EXRSF) together with its joint venture partner Polymetals Group Pty Ltd (Polymetals) have completed the arrangements for a debt financing facility of A$16M for the construction and commissioning of the White Dam Gold Project Joint Venture in South Australia with Barclays Capital (Barclays).
Together with an equity investment of A$7.5m by the Joint Venture partners, the financing will provide the total funding required for development of White Dam, including construction costs and working capital requirements and ensure Exco retains sufficient funds to continue exploration and business development activities.
The facility will be available in two tranches, A$13 million immediately and a further A$3 million when a review of the resource base currently underway is successfully completed. The approval and detailed documentation process has been completed on time paving the way for an acceleration of the construction activities with a view to first gold production in calendar quarter 1 of 2010.
The key features of the facility are summarised as follows:
- Facility: Gold-linked prepay loan;- Amount of first tranche: A$13 million; and- Strike price of first tranche A$1,151/oz;
The strike price of the second tranche of A$3 million will be determined when the prepayment is drawn, but in any event will not be lower than A$1,100/oz. The tenor of both tranches is a period of two years.
In addition, and as part of the financing arrangements, the Joint Venture partners have entered into contracts for the forward sale of 5,000 ounces of gold over the period from September 2010 to July 2011 at a price of A$1,216/oz.
Barclays Capital, the investment banking division of Barclays Bank PLC, is a leading provider of finance to the mining sector and has a wealth of experience in financing projects around the world. The Metals & Mining team at Barclays Capital is complemented by one of the strongest Commodities groups in the banking sector.
Barclays have agreed to take the arrangement fees payable by Exco in the form of 4,500,000 Exco Options at an exercise price of 28 cents and an expiry date of 10 September 2012.
The White Dam Gold Project is located in South Australia, approximately 80kms west of Broken Hill.
Approval of a Mining and Rehabilitation Programme (MARP) was received in April 2009 (see previous announcement on 7 April 2009). The project is the subject of a joint venture agreement signed between Exco and Polymetals in June 2009 whereby Polymetals have acquired a 25% interest and will manage the implementation and operation of the project. The Joint Venture entered into a bond with the Minister for Mineral Resources Development, South Australia in relation to the mining tenements in early July 2009.
Preliminary site works commenced in August 2009. With the financing and major construction and mining contracts in place, the project is on track for production in the Q1 2010.
Related Companies
Social Media
Share this Article
