Equinox Minerals Secure Up to $US580 Million to Clear Debt

Submitted by Jim Thesiger on 3 February, 2010 - 06:28

Equinox Minerals (EQN), an Australia based global mineral exploration and development company that mainly concentrates on precious and base metals has managed to secure as much as $US580 million worth of funding from the international banks to clear its debt as the miner is working to give a boost to its Lumwana copper mine in Zambia which is fully owned by the company. In a statement, Equinox recently stated that it had successfully secured an $US400 million worth of corporate loan from the government-owned Commercial Bank of China, Standard Bank, BNP Paribas and Standard Chartered Bank and is expecting to get the funding finalised in March. Equinox can see an additional $US180 million in the funding something that depends on the decision of the lenders. The news has boosted the local shares of Equinox by more than 6 percent closing the day at $3.79.

According to Equinox, the funds will be used to clear a $US582 million worth of debt facility which was signed for developing the Lumwana mine during 2006. Craig Williams, the chief executive of the company said, refinancing its current project debt facilities with a corporate loan reflects its conversion to a world-class mining asset operator from developer. Equinox stated that break fees will be incurred from the current debt facilities of the company. It is to be mentioned that the resource analysts of Macquarie termed Equinox Minerals as their first choice as far as pure leverage to a rare, large-scale development project is taken under consideration.

However, although Equinox recorded a 23 percent increase in its production at Lumwana during the December quarter in comparison with a quarter earlier, the company did face some problems to ramp up the project. In the December production results, the Perth-based miner stated that its mining team is considering several strategies in an attempt to boost up performance. It is to be mentioned that Equinox posted a $US154 million worth of loss over the first nine months of the previous year.