Avanti Mining gets preliminary commitments for $612 million financing

By Toni Weeks

San Luis Obispo, Calif., July 29 – Avanti Mining Inc. has entered into a mandate letter with six lenders for up to $612 million of debt financing facilities to develop its Kitsault molybdenum mine, according to a company news release.

The facility includes $500 million of 10.5-year senior debt, a $42 million five-year equipment finance tranche and a $70 million eight-year standby cost over-run facility.

Interest on the financing is Libor based, loan repayments are semiannual or quarterly (for equipment finance), and there are mandatory prepayment provisions of a portion of excess free cash flow. The facility will include customary provisions for a financing of this type, including fees, representations and warranties, covenants, events of default and security customary for this type of financing.

The members of the lending group are BNP Paribas, Caterpillar Financial Services Corp., Export Development Canada, Korea Development Bank, Mizuho Bank Ltd. and UniCredit Bank AG.

Final credit approval for the facility is expected in September.

Vancouver, B.C.-based Avanti is focused on the development of the past-producing Kitsault molybdenum mine in Prince Rupert, B.C., as part of a strategy to develop properties and projects that complement the steel commodity stream.

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