- Venturex Resources has received an approved Term Sheet for finance from Trafigura for a US$70 million (A$100 million) senior debt facility
- The funding package will be used to develop the Sulphur Springs Copper-Zinc Project in WA
- Minimal covenants and extended grace period, deferring principal and interest payments
- Parties will discuss the potential for an additional US$15 million cost overrun facility
- Venturex and Trafigura have agreed to enter a long-term off-take agreement for the copper and zinc concentrates to be produced at Sulphur Springs over 11 years
Venturex Resources has received an approved Term Sheet for finance from Trafigura for a US$70 million (A$100 million) senior debt facility.
This funding will help Venturex develop its wholly-owned Sulphur Springs Copper-Zinc Project which is located 144 kilometres south of Port Hedland, Western Australia.
“We are very pleased to have received an approved Term Sheet of a senior debt facility of up to A$100 million to underpin the financing and development of the Sulphur Springs Project,” Managing Director AJ Saverimutto said.
Securing the financial involvement of Trafigura as a long-term strategic funding and off-take partner represents a major step forward for the Sulphur Springs Project.
Trafigura is at the forefront of the global trading industry, with an extensive global logistics network and market-leading position in a range of physical commodity markets. Trafigura reporte global revenue of US$180.7 billion in 2018 and total assets of US$53.8 billion.
“Securing the support of a long-term strategic partner of the size and calibre of Trafigura is a huge step forward for Venturex,” AJ said.
The senior debt facility will be repaid to Trafigura through the supply of future copper and zinc concentrate production from the Sulphur Springs Project. This facility also provided Venturex with flexible terms such as minimal financial contract terms, an extended grace period for principal and interest payments and potential for early repayment if it decides.
The payment facility is for a four-year term with repayments scheduled evenly.
In addition to the senior debt facility, the company has agreed to life-of-mine for the first 11 years, then 50 per cent of the annual concentrates off-take terms with Trafigura for the production of copper and zinc from the project.
Trafigura is also pleased to be involved with the Sulphur Springs Project.
“We are delighted to have concluded a strategic funding and long-term off-take agreement with Venturex at a significant time in the development of the Sulphur Springs Project,” Trafigura Global Head of Refined Metals and Concentrates, Amin Zahir said.
In 2018, Venturex completed a highly successful Definitive Feasibility Study on the Sulphur Springs Project. The study forecasted the project to produce 65ktpa of approximately 25 per cent copper concentrate and 75ktpa of approximately 50 per cent zinc concentrate.
It’s expected Sulphur Springs will generate revenue of A$2.625 billion, free-cash-flow of A$818 million and a pre-tax NPV of A$472 million with a forecast pre-production capital cost of A$169 million for plant and infrastructure capital and pre-strip mining.
Reportedly, the companies are discussing the possibility for an excess amount of US$15 million via a cost overrun facility.