West Perth-based mineral explorer Equinox Minerals Ltd has signed a contract worth $53 million with UK-based Standard Chartered Bank to provide contingency funding for its Lumwana project.
West Perth-based mineral explorer Equinox Minerals Ltd has signed a contract worth $53 million with UK-based Standard Chartered Bank to provide contingency funding for its Lumwana project.
The full text of a company announcement is pasted below
Equinox Minerals Limited (TSX and ASX symbol: "EQN") ("Equinox" or the "Corporation") is pleased to report that it has signed a US$45,000,000 Contingent Funding Letter of Credit Facility Agreement ("Contingent Funding") with Standard Chartered Bank to provide for contingency funding obligations as required under the Lumwana Project Debt Facility as previously announced (see press release December 01, 2006).
The US$45 million Contingent Funding will be available to the Corporation in US$9 million tranches, but will only be drawn should cost overruns or other contingent funding obligations occur at the Lumwana Project ("Lumwana"). The Contingent Funding can also be utilised for general corporate purposes should funds remain under the facility post project completion. Equinox is paying Standard Chartered arranging and commitment fees on the facility and in the event of drawdown of a tranche, will issue Equinox Common Shares to Standard Chartered at that time at a discount of 6.75% to the volume weighted average trading price of Equinox's shares on the Toronto Stock Exchange over the 5 trading days preceding the drawdown, in satisfaction of Equinox's repayment obligations.
Commenting, Craig Williams, Equinox President and CEO said, "This innovative and flexible solution to the equity support obligations of Equinox has been developed by Standard Chartered Bank, who is also a lead arranger for the project financing of Lumwana. The structure allows Equinox to meet one of its key obligations under the project financing agreements; at the same time, it meets Equinox's criteria of limiting an additional call on shareholder capital, thereby limiting upfront shareholder-dilution for meeting what are contingent funding obligations. We continue to work through the ever decreasing outstanding Conditions Precedent and anticipate drawdown during Q3 2007".
Situated to the west of the world renowned Copperbelt in Zambia, Equinox owns 100% of Lumwana. The Lumwana mine will produce an average of 169,000 tonnes of copper metal per year contained in concentrates for the first 6 years of its 37 year mine life. Construction remains on schedule for commissioning in Q2 2008
