The award of the mandate to six banks and other financiers followed an extensive tender process and negotiation of key commercial terms, managing director Paul Jury said.
“We are pleased to have appointed such an experienced and capable financing syndicate,” Jury said.
“The strong response from the bank market generally, and the mandated group of banks and financiers in particular, provides a tangible demonstration of the Boikarabelo mine's value and cashflow potential.”
Subject to obtaining final credit approval and execution of documents, the financing syndicate will provide about 60% of the total funds required for mine construction.
Due diligence reports have been prepared by independent experts engaged on behalf of the financiers. The experts are Bowman Gilfillan, Coffey Mining, Jardine Lloyd Thompson, KPMG and Wood McKenzie. Their reports are under review by the financiers.
“Assuming credit approval for the debt funding, supported by the results of the due diligence, we are confident that the mine’s projected cashflow potential and value will be recognised in the price of the proposed equity raising,” Jury said.
“However, the terms of the equity raising and participants in the raising are still to be determined.”
The financiers are now progressing towards formal credit approvals for the facility. These are targeted for receipt in early November.
Financial close and first funding are expected to be subject to conditions including raising sufficient equity capital to fully fund the balance of the expected capital expenditure for mine development.
The proposed terms of the facility are that it be for nine years, including the construction period, and a senior debt facility of about $US400 million plus associated facilities (including a working capital facility). The senior debt facility will be provided via a mix of US dollar and South African rand loans and is on normal commercial terms.
Based on the current timetable, once formal credit approval is obtained, Resource Generation will proceed with an equity capital raising, which would enable development of the Boikarabelo mine to start in January 2013, the company said.
