Heemskirk secures $40m for Canada frac sand project
PERTH (miningweekly.com) – ASX-listed junior Heemskirk has secured a $40-million debt funding package to advance its Moberly frac sand project, in British Columbia.
The company reported on Tuesday that it had signed a term sheet with Sydney-based Taurus Funds Management, under which the $40-million debt package would be made available in two tranches.
The first $25-million would be used to complete the construction of the 300 000 t/y Phase 1 operation at Moberly, with the second $15-million used to fund an expansion to a 600 000 t/y production rate, once Phase 1 has been successfully completed.
Heemskirk said the funding package allowed the company to focus completely on the development of the Moberly project in an efficient and timely manner.
Project construction and commissioning was expected to take between 9 and 12 months from a development decision.
The debt funding would have an interest rate of 10% a year, a 2% arrangement fee and a 2% commitment fee. Heemskirk would also be required to issue 17.5-million options, of which half would be issued on the signing of the facility, and the remainder as pro rata for amounts drawn.
The options strike price would be calculated at a 25% premium to the ten-day volume weighted average price of Heemskirk shares prior to the date of signing the facility.
Furthermore, Heemskirk would be liable for a 2% free-on-train gross revenue royalty.
The debt facility would have a maturity date of December 2018, with a 12-month extension option.
The Taurus funding was subject to a due diligence and the completion of standard legal documentation.
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