(Alliance News) - KAZ Minerals PLC on Friday said it has signed a USD600 million credit facility with the Development Bank of Kazakhstan JSC to finance its Aktogay expansion project.
The expansion project is intended to double to capacity of the FTSE 250 miner's Aktogay mine in Kazakhstan and was approved by the board in 2017 with completion expected in 2021.
The loan will be drawn in 2019, and 2010 and extends for a 15-year term before its final maturity in 2034. The loan can be repaid in instalments, the first of which is due three years after the date of the first drawing, followed my semi-annual payments from November 2022 to 2034. The first drawing is planned for the third quarter of 2019.
The interest rate on the loan is US dollar LIBOR plus 3.9%, with a financial covenant the same at KAZ's existing facilities with the Development Bank of Kazakhstan and the China Development Bank on a ratio of total liabilities to total assets.
KAZ Chief Financial Officer John Hadfield said: "The new USD600 million debt facility with DBK provides funding for the second sulphide concentrator at Aktogay, where construction is progressing well and is on track to deliver near-term copper production growth from 2021. The Aktogay expansion is a low risk, brownfield development that is expected to increase cash flow and establish a stronger platform to deliver the Baimskaya copper project in the Chukotka region of Russia.
"KAZ Minerals has an industry leading pipeline of value-accretive projects which will sustain production growth over the next decade, when the copper market is forecast to enter a period of significant supply deficit," Hadfield added.
Shares in KAZ were down 0.7% at 564.20 pence on Friday afternoon shortly before close.
