THE BOURSE WHISPERER: Finders Resources has signed an off‐take agreement with Standard Bank for up to 60 per cent of all copper cathode produced from the company’s Wetar copper project in Indonesia.
Standard Bank will subscribe for US$5.5 million of equity in Finders in exchange for the right to buy up to 40 per cent of the Wetar copper off‐take.
Finders said it will use the funds as part of the Wetar copper project financing of near‐term capital expenditure requirements.
Standard Bank’s equity investment will be in the form of a mandatory convertible note, which will convert into ordinary shares in Finders at the end of six years.
However, if it feels it would like to do so, Standard Bank may elect to convert into ordinary shares in Finders prior to that date.
The conversion price for the first tranche is 42.7 cents per share.
Standard Bank will pay prevailing market prices for the copper cathode produced at the Wetar copper project for the life of the mine.
Subject to certain conditions, Standard Bank has also committed to subscribe for a further tranche of US$5.5 million of equity on the same terms as other investors in an equity raising to be launched to fund the construction of the Wetar copper project.
This will result in Standard Bank securing rights to a further 20 per cent of the Wetar copper off‐take.
The off‐take agreement follows a commitment by Standard Bank to participate in the US$138 million project finance facilities for the Wetar copper project.
“Standard Bank is a respected international bank and is experienced in funding resource projects around the world,” Finders Resources managing director Chris Farmer said in the company’s announceemt to the Australian Securities Exchange.
“They have made a significant long term commitment to Finders through both debt and equity funding, after extensive due diligence and review.
“I am delighted to further entrench the partnership between Finders and Standard Bank and look forward to working closely with them over the long term.”
Tennant Metals has been previously appointed marketing agent for 40 per cent of the Wetar copper off‐take.
The appointment of Standard Bank means Finders has now secured partners in relation to 100 per cent of its Wetar copper off‐take.