West Perth-based Exco Resources has asked Barclays Capital to arrange a $16 million debt financing facility, which together with the recent $7 million equity raising, will be used for the development of the White Dam gold project.
West Perth-based Exco Resources has asked Barclays Capital to arrange a $16 million debt financing facility, which together with the recent $7 million equity raising, will be used for the development of the White Dam gold project.
The announcement is below:
Exco Resources Ltd (ASX Code: EXS) (Exco) together with its joint venture partner Polymetals Group Pty Ltd (Polymetals) are pleased to announce that they have today mandated Barclays Capital (Barclays) to act as arranger of a debt financing facility of up to A$16M for the construction and commissioning of the White Dam Gold Project Joint Venture in South Australia.
Together with Exco's recent $7.2M capital raising, the financing will provide the remaining funding required for development of White Dam, including construction costs and working capital requirements and ensure Exco retains sufficient funds to continue exploration and business development activities.
Due diligence on the project has been completed. The financing is subject to agreement in relation to the terms of the facility, final internal Barclays approvals and the completion of detailed documentation which is expected to be finalised within two months.
The appointment of Barclays follows an extensive tender process in which competitive proposals were received from a number of banks. The key features of the facility are summarised as follows:
- Facility: Gold-linked prepay loan;
- Amount: Up to $16 million; and
- Tenor: Two years.
Barclays Capital, the investment banking division of Barclays Bank PLC, is a leading provider of finance to the mining sector and has a wealth of experience in financing projects around the world. The Metals & Mining team at Barclays Capital is complemented by one of the strongest Commodities groups in the banking sector who will assist in coordinating the risk management of the White Dam project.
Approval of a Mining and Rehabilitation Programme (MARP) was received in April 2009 (see previous announcement on 7 April 2009).
The project is the subject of a joint venture agreement signed between Exco and Polymetals in June 2009 whereby Polymetals have acquired a 25% interest and will manage the implementation and operation of the project.
The Joint Venture entered into a bond with the Minister for Mineral Resources Development, South Australia in relation to the mining tenements in early July 2009.
Preliminary site works have begun in preparation for the commencement of construction as soon as the financing arrangements have been finalised.
The project remains on track to deliver first gold production early in 2010.
