PERTH (miningweekly.com) – Potash developer Highfield Resources has secured a €312.5-million financing package to help fund the construction of its Muga potash project, in Spain.
The ASX-listed company told shareholders that it had agreed a non-binding indicative term sheet with a group of experienced European mining finance lenders including Société Générale, ING Bank N.V. and Natixis for a €300-million senior secured project financing facility and an additional €12.5-million cost overrun facility.
The facilities will cover a significant portion of the pre-production investment required to complete the Phase I construction of Muga.
In addition, the company has received strong interest from local Spanish banks who wish to participate in the facilities.
“As we approach construction at Muga, we have reached another critical milestone by entering into a term sheet for €312.5-million of senior debt,” said Highfield CEO Ignacia Salazaar.
“Following an extensive due diligence process by independent experts, we managed to increase the debt facility in quantity and in tenor compared to original expectations, which shows the merits and the growing confidence in the Muga project.
“This is a major achievement in the financing strategy of Muga which provides further impetus to progressing strategic investments and other financing options.”
An updated feasibility study into the Muga-Vipasca potash project estimated a capital cost to develop the project at €607-million. Over its 30-year mine life, the project is expected to produce 27.5-million tonnes of muriate of potash, with Phase 1 of the operation producing 500 000 t/y and Phase 2 increasing production to one-million tonnes a year.