TORONTO (miningweekly.com) – TSX-listed Stonegate Agricom, which is developing the Paris Hills phosphate project in Bear Lake county, Idaho, on Monday announced that it had given financing major Macquarie an exclusive mandate to act as lead arranger for arranging, underwriting and syndicating an equipment leasing facility for up to $60-million, to fund mining equipment to develop and run the project.

Stonegate said it was pursuing a financing strategy that was expected to include a combination of the lease facility, debt financing, equity, strategic partnerships and/or offtake partner contributions to fund the estimated $121-million initial construction costs for the project, as well as working capital.

In order to provide flexibility and increase its financing options, Stonegate said it intended to pursue the lease facility and its other financing options in parallel.

"The Macquarie engagement letter is a significant first step for Stonegate in securing financing for the construction of our planned mine at Paris Hills. We are delighted that the project has attracted the interest and participation of such a highly regarded global financial institution involved in financing major resource and infrastructure developments around the world," Stonegate president and CEO Mark Ashcroft said.

He noted that over the past three years, Stonegate had been successful in completing significant milestones in the development process at Paris Hills, according to the company’s initial plans. In September 2010 drilling started on the property to obtain mineral resource estimates, producing a detailed prefeasibility study with mineral reserve estimates for the Lower zone in March 2012 and then following up with a feasibility study and expanded mineral reserve estimates in December 2012.

"The company's current focus, in addition to arranging financing, is to obtain all state and county permits and approvals required in order to begin construction and production at the mine. We have made steady progress in line with our internal timetable for permitting and continue to expect our permitting work to be completed in the fourth quarter of 2014, with mine construction and initial production expected to commence by the end of 2014,” Ashcroft said.

The Macquarie lease facility was still subject to customary conditions precedent, including satisfactory due diligence, agreement on final terms and conditions and credit approvals.

The Paris Hills property’s sedimentary phosphate deposit is regarded as one of the highest-grade deposits in the world and is the highest-grade deposit on the Americas that is being mined, explored or developed.

The project has mineral reserves of 16.7-million tons of direct shipping, concentrate-quality phosphate rock, with an average life-of-mine grade of 29.5% phosphorus pentoxide.

The feasibility study completed on the project envisages production of 904 000 t/y of saleable concentrate over a 19-year mine life from underground board-and-pillar mining of the horizontal limb of the lower phosphate zone.