Taseko Mines Limited (TSX: TKO | NYSE: TGB | LSE: TKO) has been notified that Taurus Mining Royalty Fund L.P. has obtained investment committee approval for a US$50M royalty, and Societe Generale has received credit approval for a US$50M senior secured debt facility.
Upon closing, proceeds from these project level financings will be available to Florence Copper to fund the construction and development of the commercial production facility.
“The Taurus royalty and the project loan facility from Societe Generale complement the previously announced commitments from Mitsui and Bank of America. A total of US$175M from these four well-regarded industry participants is a strong endorsement of Florence Copper’s technical merits, attractive economics, and favorable environmental attributes,” commented Taseko CEO Stuart McDonald.
“Florence Copper will supply 85Mlbs of copper…to the US domestic market. With the permitting process complete and these new financings expected to close in the coming months, we can now begin construction of the commercial facility at Florence.”
The Taurus royalty will be for 1.95% of the gross revenue from the sale of all copper from Florence Copper for the life of mine. The US$50M of consideration is payable upon the satisfaction of customary conditions precedent for closing.
The US$50M senior secured debt facility will be provided by Societe Generale subject to completion of all requirements. The facility also contains a US$25M uncommitted accordion feature which can be exercised by the company in the future to increase its size to US$75M if needed, subject to additional credit approval at that time.
The maturity date of the Florence debt facility will be five years from the closing date, with no scheduled principal repayments until the maturity date when any outstanding amounts will be repayable. The facility will have a first lien charge over the assets of Florence and an unsecured guarantee from the company until completion. Societe Generale’s credit approval will be formalized in a commitment letter containing customary conditions.
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