Adventus Mining will receive a senior debt facility of $45m from Trafigura, with a term of five years, at an annual interest rate equal to SOFR, and can draw $5m early for pre-construction activities at the project
Adventus Mining signs financing agreements with Trafigura. (Credit: Alex Banner from Pixabay)
Adventus Mining has signed an Offtake Financing Agreement (OFA) with Trafigura to secure up to $55m for the development of the El Domo-Curipamba copper-gold project.
Under the terms of the OFA, Adventus Mining will receive a senior debt facility of $45m from Trafigura, of which $5m can be drawn early for pre-construction activities at the project.
The loan facility has a term of five years, at an annual interest rate equal to SOFR, subject to a 0.5% SOFR floor, along with an 8% interest margin.
The remaining amount will be received in two-staged instalments during the future construction of the El Domo Project, subject to certain customary conditions.
In addition to the loan facility, the OFA includes an offtake agreement that provides Trafigura with concentrate offtake rights to future production from the El Domo deposit.
The signing of the agreement follows a binding commitment by Adventus Mining and Salazar Resources, with Wheaton Precious Metals and Trafigura, announced in January this year.
Adventus Mining, in its statement, said: “With OFA completion, Adventus Mining has definitively secured up to $235.5m for the advancement and future construction of the El Domo Project, of which only $2.5m has been drawn to date.
“In addition to and permitted by Trafigura and Wheaton agreement terms, Adventus Mining is in discussions with third parties for up to an additional $40m of debt-related facilities that would serve as an optional future cash buffer for the El Domo Project.
“Currently, Adventus Mining has access to over $35m in cash from existing cash balances and available sources, which is sufficient to fund the company and the El Domo Project to the start of full-scale construction.”
Adventus Mining has issued 13.5 million common share purchase warrants to Trafigura at a price of C$0.513 per common share, also called Lender’s Warrants.
The Lender’s Warrants will have a term of three years, subject to share price threshold accelerator provisions based on Adventus Mining’s share price.
Trafigura currently owns around 8% of Adventus Mining, on a partially diluted basis.
The company will make $10m in Adventus Mining, subject to certain customary conditions and conditions to the facility, and not to exceed 19.99% ownership.
Curipamba project is located around 150km northeast of the major port city of Guayaquil, with a potential to become an underground mine subsequent to the open pit.