Thanks to Levelhead for pointing out Anvil share price is up in Canada since the 19th.
ASX leading the way after all!!!
Obtaining finance is critical for Anvil. The cost may not be as critical.
The following item may be a pointer to the future??? -----
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March 25 (Bloomberg) -- Borrowing costs for small gold mining companies have almost tripled in the past year as the credit crunch forces banks to demand a premium for political and security risks, the World Bank’s private financing unit said.
Banks are asking for as high as 800 basis points above the London interbank offered rate, or Libor, for a typical $400 million loan maturing in six years, said William Bulmer, associate director at International Finance Corp., the private lending arm of the World Bank. That compares with a 300-basis point premium last year, he said.
“That means many companies are not able to access debt,” Bulmer said in an interview in Singapore today, where he is attending a conference. Companies about to start production may pay a 500-basis point premium above Libor, and those still developing mines would pay 700 to 800 points, he said.
Banks have curbed lending to new raw-material projects to conserve cash as the global recession curtails demand for commodities. The Reuters/Jefferies CRB Index, which tracks 19 raw materials, dropped 36 percent last year in the biggest annual decline since at least 1957.
Debt “is definitely being repriced and some of it is pretty hard to stomach,” David Seton, chief executive officer of Toronto-based Olympus Pacific Minerals Inc., said at the Asia Mining Congress. Olympus Pacific, the first Western company to operate a mine in Vietnam since the 1990s, rejected a loan in December, he said.
A basis point is 0.01 percentage point.
‘Not Happy’
“We were not happy with the terms” for a $40 million loan with a three-year maturity at an interest rate of 12 percent, Seton said. He declined to name the bank or give more details.
Vietnam’s central bank said today it will maintain its benchmark interest rate at 7 percent in April, without giving a reason. Policy makers also kept the refinancing rate at 8 percent and the discount rate at 6 percent.
Metals Exploration Plc’s project director Ian Holzberger said banks are offering between 200 and 400 basis points above the Libor rate for small companies developing gold mines in the Philippines, which “takes into account the political and security risks,” he said.
The New People’s Army, the armed wing of the Communist Party of the Philippines, has staged attacks at overseas-owned mines in the Southeast Asian nation, including Xstrata Plc’s Tampakan copper-gold project.
Delayed Projects
London-based Metals Exploration will need to raise about $290 million in equity and debt late this year, or early next year, to build a gold processing plant in the Philippines, Holzberger said.
The company is scheduled to complete its feasibility study on the Runruno gold project, located 200 miles (320 kilometers) north of Manila in January 2010, Holzberger said. The project is estimated to have reserves of 2 million ounces of gold, he said.
A scarcity of funds has also forced some miners to delay projects in the Philippines, Natural Resources Secretary Lito Atienza said at the conference. “Some will adopt a wait-and-see attitude and delay new and existing
exploration and development projects,” he said.
Intex Resources ASA, a Norweigian company, which needs to raise $2 billion for a nickel mine and processing plant in the Philippines, extended its feasibility study to the end the year, from the second quarter, as it waits for the credit environment to improve, Intex Executive Vice President John Steen Petersen said on March 19.
OceanaGold Corp., an Australian gold producer, placed its copper-gold mine under care and maintenance after the company has failed to raise enough funds to complete construction.
To contact the reporter for this story: Luzi Ann Javier in Singapore at [email protected]
AVM Price at posting:
$1.27 Sentiment: Buy Disclosure: Held
