More upside now for GBG...All The Best
09.04.2010 05:21 PM
Gindalbie Metals Ltd says it has moved closed to begin mining its first iron ore next year after securing a $US1.2 billion ($A1.29 billion) loan facility for its flagship project in Western Australia.
Perth-based Gindalbie said on Friday it had signed a term sheet and mandate letter for the loan facility to support its $2 billion Karara iron ore project in WA's midwest region.
The 12-year loan facility is mainly sourced from China Development Bank and Bank of China and was on commercially competitive terms, Gindalbie said in a statement.
Gindalbie said the signing of the documentation was a key step towards completing debt funding arrangements for the project.
"It means that we are well on the way to being an iron ore producer next year and part of a joint venture that will generate annual revenue of about $A1 billion at start-up production levels," Gindalbie managing director Garret Dixon said.
"As the facility is based on an international interest rate benchmark, it provides a very good long-term arrangement for the project," Mr Dixon said.
The project is being developed as an equal joint venture with Angang Group International Trade Corporation (Ansteel), China's second largest steel maker.
Mr Dixon said Ansteel had played a crucial role in the loan facility negotiations, allowing Gindalbie to access globally competitive financing "in what would otherwise be a very difficult market".
Gindalbie has about $200 million in cash reserves remaining from equity payments totalling $534 million that have been contributed by Gindalbie and Ansteel to the joint venture company.
The market was unsurprised on March 30 when Gindalbie sealed a $US65 billion ($A70 billion) iron ore sales contract with Ansteel for life-of-mine production from the Karara project.
Karara had the potential to produce more than 30 million tonnes per annum for 30 years, Gindalbie said.
Initial production of direct shipping ore hematite is slated for mid-2011 and will be followed by production of magnetite concentrate and blast furnace quality pellets in the second half of 2011.
Shares in Gindalbie were up 1.5 cents, or 1.14 per cent, at $1.335
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