West Perth-based Equinox Minerals Ltd has secured a new $103 million loan facility, underwritten by a banking syndicate, for its Lumwana copper project in Zambia.
West Perth-based Equinox Minerals Ltd has secured a new $103 million loan facility, underwritten by a banking syndicate, for its Lumwana copper project in Zambia.
Additionally the company is continuing to receive liquidated damages from EPC Contractors, a joint venture between Ausenco and Bateman International, following a fire at the project in July which has delayed the start up schedule of the project.
Below is the full announcement:
Equinox Minerals Limited (TSX and ASX symbol: "EQN") ("Equinox" or the "Company") is pleased to announce the signing of a new US$80.0 million ($A103 million) loan facility ("New Loan Facility") underwritten by Standard Bank Plc and Standard Chartered Bank and to be provided by certain members of the existing Lumwana Copper Project (the "Project") banking syndicate. The New Loan Facility is structured on similar terms to the commercial tranche of the US$583.8 million Project finance debt facilities as announced December 01, 2006.
Equinox believes it prudent and advantageous to establish the additional debt finance facility at this time. The Company has also successfully renegotiated the repayment schedule to commence at the end of Q3-09 with respect to some elements of the US$583.8 million facilities reflecting the revised Project startup timetable.
The New Loan Facility will enable the Company to meet the additional working capital requirements that resulted from the delayed startup. Equinox considers that the establishment of this New Loan Facility is preferable to drawing down its existing US$45.0 million Contingent Funding Facility, thereby ensuring that the Company maintains appropriate levels of liquidity while limiting shareholder dilution.
The Contingent Funding Facility (as announced June 29, 2007) was established to provide the Company with a Project cost overrun provision and remains available to Equinox.
On July 07, 2008 Equinox announced that an electrical fire incident (the "Incident") at the Project caused damage to the 20MVA transformer and adjacent 11KV substation subsequently delaying commissioning and the commencement of copper concentrate production from the Project. The Company reports that rectification works remain on schedule for a December 2008 commissioning (as announced July 18, 2008) with all replacement equipment now available on site for installation and remediation.
Following the Incident, the Company reports that insurance enquiries have now concluded with the Project insurance syndicate accepting indemnity for the Incident and the Company quantifying its losses for submission to the insurers. The Company also confirms that it is continuing to receive liquidated damages from its EPC Contractor (a joint venture between Ausenco Projects Limited and Bateman International Projects BV, a subsidiary of Bateman Engineering NV).
Mr Craig Williams, Equinox's President and CEO commented, "The New Loan Facility is evidence of the strong confidence our banking syndicate has in the Project. Along with confirmation of receipt of our Incident insurance indemnity, Equinox and its shareholders can now be afforded, during this unprecedented period of market volatility, the necessary levels of stability and liquidity required to expeditiously move the Project into copper concentrate production and deliver further shareholder value."
