BCI Minerals (ASX:BCI) has secured nearly $1 billion in debt finance for the Mardie Salt and Potash Project.
KPMG Corporate Finance and Herbert Smith Freehills are advising BCI.
BCI Minerals has agreed and executed a Syndicated Facility Agreement (SFA) with Northern Australia Infrastructure Facility (NAIF), Export Finance Australia (EFA), Export Development Canada (EDC), Westpac, and Industrial and Commercial Bank of China (ICBC) for the total $981 million in project debt finance for the Mardie Salt and Potash Project, located 80km from Karratha in the Pilbara region of Western Australia.
The company will also soon announce details including equity funding, offtake, and approvals.
Financial close for the debt facilities is conditional on satisfying typical project finance conditions precedent including equity funding, approvals, expert report updates, and other customary associated conditions.
BCI says several conditions precedent have already been satisfied in parallel with the signing of the SFA, furthering progress towards achieving financial close. The SFA also includes a number of conditions precedent to first utilisation.
These relate to binding offtake agreements, execution of remaining project contracts (including the salt plant, transshipment and dredging contracts), updating the base case financial model, and other requirements typical in a project financing of this type.
BCI is targeting financial close in Q1 2024 and the first drawdown of debt by mid-2024, subject to satisfying all remaining conditions precedent.
BCI Managing Director David Boshoff says the signing of the SFA is a significant achievement in securing the funding needed to deliver BCI’s Mardie Project.
“The ongoing support shown by this diversified lender group indicates strong confidence and trust in the project over the long term.”
As announced on 9 October 2023, BCI received credit approval from EDC for $150 million in commitments. BCI previously announced that 2 commercial banks, being Westpac and ICBC, had each committed $90.5 million and the Australian government agencies NAIF and EFA had collectively committed a total of $650 million in funding for the project.
The SFA delivers a total of $981 million of debt finance to fund the Mardie salt development. As advised in BCI’s FY23 results presentation, debt funding for the sulphate of potash (SOP) plant is expected to progress during 2024 following the completion of further design and cost development, subject also to several provisions in the SFA, including lender approval.
The project finance facilities are fully underpinned by forecast salt revenues only, in what BCI describes as the ‘salt-first’ phase of the project.
The $981 million of commitments have been allocated across $830 million of construction loan facilities with 7, 11, and 15- year tenors and $151 million of facilities for bank guarantee requirements and any cost overruns.
BCI says the SFA also provides for unused cost overrun facility commitments to be converted to working capital facilities under certain terms and conditions to support the project post completion.
Westpac has been appointed sole sustainability structurer for the $331 million of 7-year tenor facilities.
The Green Financing Framework and the Second Party Opinion report have already been completed ahead of SFA signing. BCI notes the Green Commercial Loan Facilities align with the Green Loan Principles, recognised as the international market standard for Green Loans, and reflect the strong ESG credentials of the Mardie Project.
Write to Adam Orlando at Mining.com.au
Images: BCI
