TORONTO (miningweekly.com) – The first drawdown has been made on a $167-million project finance package provided for the Kayelekera uranium mine, in Malawi, TSX- and ASX-listed Paladin Energy reported on Monday.

An initial $84,5-million was drawn down, and will be reimbursed to Paladin for capital already spent on developing the project, while the remainder of the facility will be used at Kayelekera and for working capital expenditure.

The 3,3-million pounds a year Kayelekera mine is currently in production ramp-up, after starting final commissioning during the June quarter.

The project finance facility has been provided by a syndicate comprising Société Générale, Standard Bank and Nedbank Capital and is the same syndicate of banks that provided project finance for Paladin's Langer Heinrich Stage I project, in Namibia.

The package consists of a $145-million project financing facility – currently drawn to $84,5-million – a $12-million cost overrun facility and a $10-million performance bond facility.

The Export Credit Insurance Corporation of South Africa (ECIC) has backed $110-million of the project finance facility.

“The successful drawdown on this facility in the face of the current credit markets stands testament to the robust economics of the Kayelekera uranium mine and the ongoing support from the lenders,” Paladin MD John Borshoff said in a statement.

“With the support of ECIC and Paladin’s commitment to source materials from South Africa during construction, Paladin has been able achieve a very competitive cost of funding when compared to other projects of this nature.” he said.

“I congratulate the Malawian government, the lending syndicate, ECIC and our team for completing the first-ever mining project finance facility in Malawi.”

Paladin Energy said last month it expects to produce 6,6-million pounds of uranium in its fiscal 2010 year.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.