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Equinox Minerals secures $658m to clear Lumwana debt

Equinox Minerals secures $658m to clear Lumwana debt
By Chiwoyu Sinyangwe
Thu 04 Feb. 2010, 04:00 CAT

EQUINOX Minerals Limited has secured up to US $658 million funding from global banks including state-owned Commercial Bank of China to pay off Lumwana Copper Mine debt.

The debt repayment was being seen as a plan by Lumwana Copper Mine to increase the firm’s production ahead of anticipated increases in copper demand.
Equinox, which is dual-listed in Canada and Australia, yesterday stated that it had secured about US $355.4 million corporate loan from Chinese biggest bank, Commercial Bank of China, BNP Paribas, Standard Bank and Standard Chartered Bank.

The loan credit was secured in Australian dollars and the news sent the Equinox Minerals Limited's local shares up by more than six per cent to close at US $3.79.

The funding is expected to be finalised next month and can be increased by up to 180 million Australian dollars if approved by the lenders.
Equinox stated that it would use the funds to repay about US $517 million debt facility signed to develop Lumwana in 2006, which at September 30 last year had about US $319 million owing.

Commenting on the credit line, Equinox Minerals Limited chief executive Craig Williams said: “Refinancing our existing project debt facilities with a corporate loan reflects our transition from a developer to an operator of a world-class mining asset.”

Following the credit line, Equinox Minerals Limited would incur break fees from its existing debt facilities of between US $13 million and US $17.7 million.
Macquarie resource analysts said in a recent note to clients that for pure leverage to a rare, large-scale development project, “we retain Equinox Minerals as our number one pick."

But Equinox has had trouble ramping up Lumwana Copper Mine despite a 23 per cent increase in production in the December quarter last year from the previous quarter.

"The mining team is working on a number of strategies to improve performance and mine productivity," Lumwana Copper Mine stated in its December production results.
Lumwana Copper Mine recorded about US $136.9 million loss over the first nine months of last year.

Labels: EQUINOX, LUMWANA MINING COMPANY

posted by MrK @ 3:55 PM