Vancouver-headquartered Ero Copper on Monday announced an offering of $400-million of senior notes to restructure its debt and for capital expenditure (capex) related to a planned new mine in Brazil.
The company will use the proceeds from the offering, together with cash on hand, to repay the outstanding balance under its senior secured revolving credit facility of about $50-million.
The size of its senior secured revolving facility will also be reduced from $175-million to $75-million.
Regarding the capex, Ero said that it would use some of the proceeds for the construction of the Boa Esperanca project, which will start in the second quarter of 2022, subject to board approval.
According to the 2021 optimised feasibility study, upfront capital of $294-million will be required to build a mine that will produce an average of 35 000 t/y of copper at $1.12/lb over the first five years of 12-year mine life.
The project has a net present value of $380-million and an internal rate of return of 41.8%.