Atico Mining (TSX-V:ATY) has secured a US$111.4 million ($159.4 million) financing package comprising a US$95 million project finance facility and US$16.4 million convertible debenture with Trafigura.
The company entered into a secured project finance facility with Trafigura to fund construction and development of the La Plata Project in Ecuador, alongside a convertible debenture private placement with a Trafigura affiliate.
CEO Fernando Ganoza says the financing package is a ‘natural fit’, given Atico’s ‘decade-long’ relationship with Trafigura.
“Following extensive due diligence, this investment signifies a strong vote of confidence in the quality of our asset,” Ganoza says.
“The financial flexibility provided by this package allows us to strengthen our balance sheet while simultaneously funding all necessary pre-construction activities.”
The project finance facility will be made available to subsidiary Compañía Minera La Plata through one or more drawdowns over approximately 2.5 years following construction commencement or 31 March 2027.
The facility matures seven years after the drawdown period and bears interest at adjusted term SOFR (secured overnight financing rate) plus 7.5% per annum.
Drawdowns require satisfaction of customary conditions precedent and include standard financial covenants. The agreement provides for a parent guarantee from Atico, which will be released once La Plata achieves completion, plus security over all project-related assets.
Under the convertible debenture agreement, Atico will receive US$16 million in exchange for issuing the US$16.4 million face value debenture, accounting for an original issue discount.
The debenture converts to common shares at US$0.22 per share, representing a 40% premium to the 20-day volume-weighted average price on 28 September.
The debenture also matures five years and one day from issuance and accrues interest at 7% per annum if paid in cash or 10% if paid in shares. Atico can force conversion of up to 25% of the principal on four separate occasions if share prices exceed specified thresholds starting at 130% of applicable volume-weighted average price.
Proceeds will repay approximately US$3.5 million Trafigura debt, settle US$6.98 million owed to Dundee under a 12% subordinated debenture, initiate pre-construction activities at La Plata, and fund general corporate purposes.
Atico will also issue 16.15 million shares at US$0.1548 per share to settle US$2.5 million of existing Trafigura debt, completing the repayment of that facility.
The transactions require TSX Venture Exchange approval, with the private placement and shares-for-debt transaction expected to close around 13 October 2026.
Atico Mining is focused on exploring, developing, and mining copper and gold projects in Latin America. It also operates the El Roble mine and is developing the La Plata volcanogenic massive sulphide project in Ecuador.
Write to Paula Fabe at Mining.com.au
Main image: Atico Mining
