LionOre secures $250 million facility for the Tati Nickel Activox'R' project
LionOre Mining International Ltd. (TSX:LIM) (ASX:LIM) (LSE:LOR) (BSE:LIONORE)....
LionOre Mining International Ltd. (TSX:LIM) (ASX:LIM) (LSE:LOR) (BSE:LIONORE) Monday announced that it has selected Rand Merchant Bank ("RMB") as the sole underwriter for a non-recourse nine and a half year $250 million project funding package at a weighted average interest rate of LIBOR plus 1% for the Tati Nickel Activox(R) and DMS Projects ("the Activox(R) Project") in Botswana.The remaining funding required ($370 million) will be provided by cash currently on hand at Tati Nickel (approximately $100 million) and from cash generated by Tati Nickel's existing operations during the construction phase.On securing the project funding for Activox(R), Colin Steyn, President and CEO of LionOre said, "The ability of the Activox(R) Project to raise this significant amount of debt at extremely attractive terms clearly reflects the confidence and robustness of the project as we now enter the next phase of the commercialization of the Activox(R) technology".LionOre received detailed term sheets from a number of leading international financial institutions. Following an adjudication process, RMB was selected as the sole underwriter based on an analysis of the terms and conditions offered by all of the interested parties.RMB is the investment banking arm of FirstRand Bank Limited, one of South Africa's largest financial services groups with a market capitalization of $18 billion. RMB has a long relationship with LionOre and Tati Nickel, having funded the construction of the Tati concentrator in 2002 and the Activox(R) demonstration plant in 2004.RMB has received credit approval for the provision of the funding which is subject to the completion of final legal documentation and the fulfilment of certain conditions typical for funding of this nature. Completion of this documentation is expected in the first quarter of 2007.To provide certainty of future operating cash flows and the resulting LionOre funding contribution of $370 million, RMB has required Tati Nickel to enter into limited hedging arrangements comprising approximately 35% of its nickel production over a two year period, 50% of its copper production over a two year period and a lesser proportion of its anticipated copper production in the subsequent year as follows:
The volumes set out above represent 12.2% and 14.9% of LionOre's anticipated nickel production for 2007 and 2008 respectively.