THE BOURSE WHISPERER: Venture Minerals (ASX: VMS) has secured debt financing from BNP Paribas for the company’s Riley Direct Shipping Ore (DSO) project in northwest Tasmania.
The financing comes in the form of a $15 million, two year, revolving line of credit, which the company indicated would essentially be a standby working capital facility for its 100 per cent-owned iron ore mining operations.
Venture described the facility as competitively priced and fully flexible with both drawdown and repayments at its discretion.
BNP Paribas has completed due diligence and has received credit committee approval.
The negotiation of the debt facility follows the grant of the Riley mining lease in December 2012, and the recent appointment of Shaw’s Contracting as preferred mining contractor on the project.
Venture said securing debt financing was another step forward for the company as it workls towards becoming a one million tonnes per annum iron ore producer commencing in 2013.
“Venture is now an emerging producer with a strong cash position, which combined with the above debt facility, sees the company fully funded into production on the Riley DSO project,” Venture Minerals managing director Hamish Halliday said in the company’s announcement to the Australian Securities Exchange.
“Venture is very pleased to be able to attract the calibre of BNP Paribas as project financier, which is a testament to the quality and potential of Venture’s projects in northwest Tasmania.”
Key features of the financing facility include:
i) Finance period of two years including a Revolving Cash Advance Facility with a limit of $15 million for the project financing of Riley DSO project;
ii) Revolving credit with flexible repayment and redraw availability with stepped limit reductions during the second year of the loan life;
iii) Revolving Bank Guarantee Facility for current and future bonds to a facility limit of $2.5 million;
iv) Discretionary Commodity Hedging Facility to a limit of 500,000 tonnes iron ore to be at the company’s discretion;
v) All facilities are secured over the DSO mining tenements only;
vi) Competitive facility costs and interest rate margins;
vii) BNP Paribas has completed its due diligence review of the DSO pProject and Facilities are credit committee approved; and
viii) Subject to completion of facility documents and condition precedents including project licences and approvals.