Mandate Awarded for $640 Million Kitsault Project Financing
VANCOUVER, BC -- (Marketwire) -- 04/19/12 -- Avanti Mining Inc. (TSX VENTURE: AVT) (PINKSHEETS: AVNMF) ("Avanti" or the "Company") is pleased to announce that it has entered into a mandate letter with five lenders for up to $640 million of project financing to develop the Kitsault molybdenum mine. The lending group is comprised of:
- UniCredit Bank AG ("UniCredit")
- KfW IPEX-Bank GmbH ("KfW")
- Export Development Canada ("EDC")
- Korea Development Bank ("KDB"), and
- Caterpillar Financial ("CAT")
The mandate letter has preliminary approval of each of the proposed lenders but requires the completion of lenders due diligence, final credit approval and negotiation and execution of a loan agreement under Ontario law.
The key terms of the mandate letter are $560 million senior debt for a term of 12 years plus $80 million in the form of a standby cost over-run facility (if needed) with a term of 8 years. The interest rate is LIBOR (London Interbank Offer Rate) based, loan repayments are semi-annual and there is a prepayment provision of a portion of excess free cash flow.
The funding under this facility will be subject to the customary conditions precedent for a financing of this type including the issuance of an environmental certificate under the Canadian Environmental Assessment Act and the BC Environmental Assessment Act, the necessary permits required for construction and equity investment by Avanti and its strategic partner. There is no certainty that the transaction contemplated in the mandate letter will be successfully completed.
"This is a key milestone for Avanti to be able to arrange a very substantial portion of the $850 million total financing needed for the Kitsault mine," stated Mr. A.J. Ali, CFO. "It reflects significant financial risk mitigation for a strategic partner, shareholders and other stakeholders."
"I am delighted that Kitsault has entered into this mandate for project financing. This confirms our belief that Kitsault is a world class molybdenum deposit in a well known mining jurisdiction and can be developed in a manner that protects and supports the local communities," said Mr. Craig Nelsen, President & CEO.
Avanti Mining Inc. is focused on the development of the past producing Kitsault Mine Project located north of Prince Rupert in British Columbia. In late 2010, Avanti completed the Kitsault Feasibility Study on the Kitsault Mine Project, dated December 15, 2010, prepared by AMEC Americas Limited that showed Proven and Probable Reserves of 232.5 million tonnes averaging 0.081% molybdenum. Ken Collison, P. Eng., Senior Vice President Project Development and a Qualified Persons as defined by NI 43-101, is responsible for the technical information in this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements: This news release contains certain forward-looking information concerning the business of Avanti Mining Inc. (the "Corporation"). All statements, other than statements of historical fact, in particular statements herein about the timing and advancement of the Corporation's Environmental Assessment application for the Kitsault Project completion of the debt financing, the obtaining of permits and the equity investment by Avanti and a strategic partner are forward-looking statements. These forward-looking statements are based on the opinions of management at the date the statements are made and are based on assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Corporation's expectations include the need for cooperation of government agencies and native groups in the preparation of the EA application, the fact that the Corporation's employees and consultants may divide their time between other projects and other risks and uncertainties disclosed in the Corporation's Annual Information Form for the year ended December 31, 2010, which is available at www.sedar.com. The Corporation is under no obligation to update forward-looking statements if circumstances or management's opinions should change, excepting as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
For further information, please visit www.avantimining.com, or contact:
A.J. Ali
Chief Financial Officer
303-565-5491, extension 4472
or
Craig J. Nelsen
Chief Executive Officer
303-565-5491, extension 4471