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Egyptian tantalum-tin project attracts more potential backers

LONDON (Metal-Pages) 30-Apr-13. More financial backers have stepped forward for the Abu Dabbab tantalum-tin-feldspar project in Egypt, Australian investor Gippsland a joint venture partner in the project alongside the Egyptian government reported.

After a consortium of Egyptian banks joined forces to raise debt finance for the project, Gippsland said it has been approached by a further three “substantial Gulf financial institutions” who have expressed interest in participating in the debt financing package for the joint venture Tantalum Egypt (TE JSC).

The required investment for the project has been previously estimated in the range of $225-250 million for the first phase of the Abu Dabbab project. The first phase would be a 3m tpy open-pit mine with average projected annual output of 925,000lb of tantalum pentoxide (Ta2O5) and 2,300 tpy of tin.

The company said that “opportunities for mezzanine debt financing of TE JSC for part of the balance of the funds required for the development of the project are being pursued”.

The balance of funds after senior debt financing and mezzanine debt financing are likely to come from shareholder loans to be provided by Gippsland’s subsidiary Tantalum International Pty. Gippsland said that to avoid diluting its own shareholder base it would prefer to secure investment by “MENA (Middle East and North Africa) financial institutions or industry groups” into Tantalum International or a special purpose vehicle formed for the transaction.

Two potential MENA investors have advised the company that their boards have approved such an investment in tantalum International in principle, and have appointed an independent technical advisor (ITA). The consortium of Egyptian banks has appointed Wardell Armstrong to act as the ITA for the transaction.