Friday, August 09, 2013

Banks sign billion-dollar financing deal for Rosemont Copper mine

 Augusta Resources has signed an agreement with a group of 12 financial institutions that will provide over a billion dollars to fund construction of the company's Rosemont copper mine in the Santa Rita Mountains south of Tucson, according to an announcement made by Jamie Sturgess with Rosemont to the Arizona Mining Alliance today in Tucson.  [Right, location map of proposed mine site.  Credit, USFS]

A news release from Augusta explains the details:

Augusta Resource Corporation is pleased to announce that its wholly owned subsidiary, Rosemont Copper Company, together with its joint venture partners, LG International Corp. and Korea Resources Corporation (together with Augusta, the "Sponsors") have executed a project financing mandate letter (the "Mandate Letter") with a syndicate of twelve international financial institutions (the "Mandated Lead Arrangers" or "MLAs").

The Mandate Letter sets out an exclusive arrangement with the MLAs describing the activities needed to arrange a limited recourse loan facility for the construction of the Company's Rosemont Copper Project ("Rosemont") in Arizona.  The proposed senior secured loan is expected to provide all of the debt required for Rosemont, including a cost overrun component.  The Mandate Letter sets forth the required steps, including agreement on final terms and conditions and requisite documentation for the loan, completion of due diligence, and procurement of credit approvals, as well as time frames for completing these steps.  The Mandate Letter also specifies the roles and responsibilities of the MLAs, appoints certain MLAs to agent roles and stipulates certain fees payable to the MLAs and agents. 

The twelve MLAs who have signed the Mandate Letter include: BNP Paribas, Commonwealth Bank of Australia, Crédit Agricole Corporate and Investment Bank, Export Development Canada, Export-Import Bank of Korea (Financial Advisory and Structuring Department), ING Capital LLC, KfW IPEX-Bank GmbH, Korea Development Bank, Korea Finance Corporation, Korea Trade Insurance Corporation, and Mizuho Bank, Ltd.

The MLAs are being advised by Shearman & Sterling LLP (Lenders' Counsel), DeConcini McDonald Yetwin & Lacy, P.C. (Lenders' Arizona Counsel), and SRK Consulting (U.S.), Inc. (Lenders' Independent Engineer). 

The Sponsors are being advised by Endeavour Financial International Corporation (Financial Advisor), Allen & Overy LLP (Project Finance Counsel), Fasken Martineau DuMoulin LLP (Corporate Counsel to the Company), and Fennemore Craig, P.C. (Sponsors' Arizona Counsel).

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