This announcement didn't surprise me, i've been involved in...

This announcement didn't surprise me, i've been involved in financing several offshore mining projects like this and where CP's were not met and the offer of bank funding was withdrawn and i have suspected the bank funding and LC was going to be an issue since the debt was announced. The best bank for a junior to get project funding from is one that specialises in mining. that is because they understand the risks of mining and are able to work through issues better. Banks will typically have their client facing salesmen who promise the world, but behind them is the credit committee that has the final say as to whether the finance is to be approved. A concern here is that CRDB has no experience in funding start up mining projects and would be unlikely to be able to deal with any curve balls in a timely manner. secondly i have seen that in africa, offshore transactions are watched closely by the Central banks and local banks are very cautious so as to not breach any rules and risk their jobs or penalties being imposed by the Central bank. This is the first time i seen bank funding given to a one project junior where an LC has been required as part of the security package. Debt funding for mining projects is referred to as "Project Funding" as the only security junior miners company can provide to the lender is the project itself. An LC is probably the best security a bank can get because if the company cannot pay, then the bank merely calls in the LC and is paid. thus risk is shifted from the lending bank to the bank that issues the LC to the extent of the value of the LC, credit worthiness of the issuing bank and ability to transfer the funds cross jurisdictions. A bank would only accept an LC from a respected bank, and a bank would only issue an LC if it solid security, like a term deposit, other assets or cashflows from existing businesses of the backer of the LC. So it begs the question, which bank is issuing the LC, how much is it for and who is providing the security.....and why. I'm sure they would not be doing it out of the goodness of their heart so there must be a decent return to the backer of the LC. However WKT has not mentioned any finance cost associated with the LC. Only the CDRB costs.