Photo by: Bloomberg
PERTH (miningweekly.com) – Copper miner Finders Resources has realised $42.5-million in debt reduction following the restructure of its copper hedge.
The miner told shareholders on Thursday that it had completed a restructure of its current copper hedge book of 38 126 t, closing a total of 21 650.5 t, and adjusting a further 16 475.5 t to reduce the forward price from an average of $5 912/t to $4 806/t.
The remaining hedging was in place from January 2017 to March 2019, and represented around 26% of the copper cathode production over that period, and 11% of the life-of-mine production from the Wetar project, in Indonesia.
Finders noted that the restructure has generated proceeds of $42.5-million for Finders subsidiary BT Batutua Tembaga Raya (BTR), all of which has been applied to reduce existing term loan debt facilities.
Following this reduction, total bank debts were now at $103-million.
“Given the recent movements in the copper price, the boards of both Finders and BTR saw an opportunity to crystallise a significant proportion of the value of the hedge book to reduce debt and strengthen our financial structure for the next phase of growth,” said Finders MD Barry Cahill.
As part of the arrangements to close out the hedges, BTR and its lenders were in negotiations around additional changes to the facility agreement, taking into account the reduction in the principal amount of the debt, and to more closely align future repayments with anticipated cash flow from the Wetar project, following the hedge close-out.