BCI Minerals has successfully obtained credit approvals for the complete amount of $981 million in project finance necessary for the Mardie salt project. These credit approvals have been granted by all significant loan providers, which include Export Development Canada (‘EDC’), two prominent commercial banks, and a 15-year facility worth $490 million from the Northern Australia Infrastructure Fund (‘NAIF’).
BCI Minerals Limited (ASX: BCI) announce that it has obtained endorsements for a $150 million project finance facility for the Mardie Salt Project from EDC, as well as approvals for an additional $31 million of project finance facilities from the two existing commercial bank lenders, bringing their individual commitments to $90.5 million each. These approvals are contingent upon the satisfaction of typical conditions precedent for project financing. The construction of the EDC facility is contingent on the Mardie Project obtaining the anticipated contracts and/or supplies from Canadian businesses.
The company went on to say that in addition to the project financing approvals for the Mardie Salt Project that were just recently announced from the federal government entities NAIF and EFA, these credit approvals have now also been granted. For the Project, the Australian federal government has given its approval for funding in the amount of $650 million. This funding will come in the form of a $490 million, 15-year facility from NAIF and a $160 million, 11-year facility from EFA.
With the exception of the sulphate of potash (SOP) plant, these facilities will provide funding for the entirety of the Mardie Salt Project. According to the information provided in BCI’s presentation of financial results for FY23, it is proposed that loan funding for the SOP plant will be progressed during the year 2024 following the completion of further design and cost development. The Project financing facilities are supported wholly by anticipated salt revenues.
The three facilities have a term of seven years and include a cost overrun facility in the amount of $81 million, a construction facility in the amount of $180 million, and a bank guarantee facility in the amount of $70 million for bonds that are required under construction or operational contracts. Given the high environmental, social, and governance credentials of the Mardie Project, the objective is to pursue Green Loan accreditation for the 7-year construction facility, the company stated.
The international benchmark for Green Loans is the Green Loan Principles established by the Asia Pacific Loan Markets Association, which the Green Loan Facilities will follow. For potential and existing investors and bankers, the Green Loan accreditation serves to certify the high environmental, social, and governance credentials of the Mardie Salt Project. During the operating phase of the Mardie Project, more than 99% of the energy that is necessary to generate salt and SOP will be derived from natural solar and wind sources.
It is essential to prove eligibility for a Green Loan by meeting the criteria for the prevention of pollution, the recovery of materials, the re-use of resources, and the creation of agricultural fertiliser as a by-product through environmentally responsible means.
All of the facilities are still contingent upon the completion of formal documentation, the acquisition of the necessary tenure and approvals for the optimal feasibility study area, the receipt of equity capital, the establishment of offtake arrangements, and the fulfilment of any additional restrictions that are customarily associated with loans. BCI Minerals plans to finish the formal debt documentation in the first half of the fiscal year 2024 and make the first withdrawal of debt in the second half of the fiscal year 2024, provided that all applicable conditions precedent are satisfied.
David Boshoff, Managing Director of BCI, made the following statement:
This completion of the Project finance package is an important project milestone, with the support shown by key lenders indicating strong confidence in BCI’s Mardie Project. The participation of EDC, alongside NAIF, EFA, and the two commercial banks provides BCI with a strong, diversified lender group, who are willing to support the Project in the long term.
