TORONTO (miningweekly.com) - Vancouver-based Quadra Mining has met all the requirements for a $37,5-million syndicated project loan facility, to complete its Franke copper project in Chile, and has drawn down the full $30-million term loan component of the facility.

The $7,5-million working capital facility is expected to be drawn down in the near future, Quadra said on Tuesday.

The term loan will bear interest at the London interbank offered rate plus 5,5%, with semiannual principal repayments starting in March 2010, and a final maturity date in March 2014.

The loan also includes a 67% cash flow sweep by the lender, a parent company guarantee until economic completion, and other terms, conditions and covenants customarily associated with project finance facilities.

As required under the loan agreement, Quadra has entered into 'zero-cost collar' contracts and put option contracts for a total of 43-million pounds of copper.

The 'zero-cost collar' contracts ensure that the company will receive a minimum floor price of $1,80/lb and a maximum price of $2,16/lb for 28-million pounds of copper sales between the fourth quarter of 2009 and the second quarter of 2010, the firm said.

The copper put option contracts were acquired at a cost of $5-million and ensure that the company will receive a minimum floor price of $1,80/lb for 15-million pounds of copper during the third and fourth quarter of 2010.

Quadra acquired the Franke project, which is essentially mechanically completed and is now going through commissioning, when it bought Centenario Copper last month.

At the time of the acquisition, Quadra assumed long-term debt of $39-million, net of hedge proceeds, but repaid the loan in full on May 14, it said on Tuesday.