Photo by: Bloombeg
PERTH (miningweekly.com) – ASX-listed potash developer Highfield Resources has secured project finance facilities of up to €222-million to fund the development of its Muga potash mine, in Spain.
The company on Thursday said it had agreed to a mandate with four major European commercial banks, under which the mandated lead arrangers would use their best efforts to arrange an eight-year term facility and cost overrun facility.
The €222-million facility would have a debt-to-equity ratio of up to 65%.
“The mandate with the four European commercial banks provides a high level of confidence that the funding process will be completed prior to the start of construction at our flagship Muga mine, which we continue to target in the December quarter,” said Highfield MD Anthony Hall.
“The four banks have signed the mandate after receiving initial internal approvals to participate in a project finance syndicate.”
Due diligence was expected to be completed by October, enabling the execution of definitive legal documentation shortly thereafter.
A previously completed definitive feasibility study into Highfield’s Muga project estimated that a capital investment of $256-million would be required to deliver 1.12-million tonnes a year of granular potash over 24 years.