Norton Rose advises on US$205 million term loan and cost overrun/working capital facility for Boseto project in Botswana
8 August 2011
A team from the UK, Australia and South Africa offices of international legal practice Norton Rose Group has advised the joint lead arrangers in relation to a US$205 million term loan and cost overrun and working capital facility to Discovery Copper (Botswana) (Proprietary) Limited for the development of the Boseto copper and silver project in the Ngamiland district of Botswana.
The joint lead arrangers on the deal comprised Standard Chartered Bank, The Standard Bank of South Africa Limited, Credit Suisse AG and Caterpillar Financial SARL.
The transaction represents the latest in a stream of debt financings of mining projects in the emerging markets; further proof of the appetite in the market of leading banks for project debt financings in commodities and mining.
The project is currently under construction and remains on target for commissioning and first production in the first half of 2012. The loan is scheduled to be repaid in ten quarterly payments from December 2012.
The joint lead arrangers were advised by a Norton Rose LLP team led by Head of Mining and Commodities, Martin McCann, assisted by Dan Metcalfe, Mark Berry, Natalia Leszczewski, Jenny Waites and Jessy Makdessi.
Norton Rose South Africa (incorporated as Deneys Reitz Inc) partner Jackie Midlane and Norton Rose Australia partner Douglas Hall assisted with the due diligence and local law aspects of the financing arrangements.
Martin McCann, Head of Mining and Commodities at Norton Rose Group, commented:
“This deal represents the first time that our new colleagues in South Africa worked with Norton Rose LLP and Norton Rose Australia on a project financing in the mining sector. It was a joy. People often say that the trouble with project finance is that it takes too long, however this deal closed in a relatively new country for project finance in just four months. This was certainly helped by the fact that the banks have significant African experience and the borrower was both practical and reactive.”
Discovery Copper (Botswana) (Proprietary) Limited, which is a wholly-owned indirect subsidiary of Discovery Metals Limited, entered into the term and cost overrun and working capital facility agreement with (amongst others) the Joint Lead Arrangers for the development of its 100 per cent owned copper and silver mine. Discovery Metals Limited is an ASX/AIM/BSE listed copper exploration and development company, which is focused geographically on the Kalahari Copperbelt in north-west Botswana. Discovery Metals Limited and Discovery Copper Mauritius Ltd (a direct subsidiary of the parent) acted as guarantors on the deal.
The funding from the banking syndicate will be applied as to US$105 million for the processing plant and US$75 million in respect of the mine mobile fleet. In addition to the US$180 million project and equipment finance, the syndicate provided a US$25 million overrun and working capital facility.
The debt project finance facility is secured over the Boseto mine project assets, leases and 100 per cent of the shares in Discovery Copper (Botswana) (Proprietary) Limited.
Standard Chartered Bank, The Standard Bank of South Africa Limited and Credit Suisse International provided hedging in respect of the copper and silver prices for the deal as required pursuant to the terms of the Boseto project finance package.
The Borrower Group was advised by Mayer Brown International LLP (in respect of matters of English law) and Hynes Lawyers (in respect of matters of Australian law) on the project debt financing.
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