Heavy Minerals receives funding letter of support from Atradius Dutch State Business

Heavy Minerals (ASX:HVY) has secured Dutch government-backed project finance support, subject to due diligence, for the potential development of the company’s Port Gregory Project.

The company reports a letter of support was received from Atradius Dutch State Business, which manages the government credit guarantee scheme on behalf of the Netherlands government’s official Export Credit Agency (ECA).

Atradius is set to begin due diligence to assess insuring export financing for the Port Gregory Project, where Heavy Minerals notes a significant percentage of the capital expenditure — some $110m — could potentially qualify for Dutch ECA cover based on Royal IHC’s Port Gregory supply content.

The letter of support follows engagement with the company’s project study consultant, IHC Mining — a subsidiary of Royal IHC, which has sought project build investment finance support from the Dutch state via Atradius.

Heavy Minerals says ECA cover typically supports favourable debt financing terms, including competitive market rates and repayment terms

The company’s share price rose 7.499% to close at $0.107 on the back of the announcement.

To promote Dutch exports, Atradius offers insurance and guarantees products for projects involving the export of capital goods from the Netherlands. ECA cover from Atradius is often used to assist Dutch exporters in securing export transactions and increasing the capacity to raise finance from banks for projects involving Dutch exports

Heavy Minerals reports the Dutch ECA scheme was identified as applicable to the company’s Port Gregory Project based on a range of factors. These include the potential provision of mining hardware, the process plant, and supporting infrastructure from Dutch-owned Royal IHC, which has supported the company with technical, engineering, and project study work for the Port Gregory since being listed in September 2021.

The company says interest rates charged by lenders on debt guarantee by ECA Cover are typically lower than commercial rates, as the repayment of debt is insured, with longer terms a feature of ECA-supported debt.

Further due diligence will be undertaken by Atradius as Prefeasibility and Bankable Feasibility studies are undertaken at the project.

Heavy Minerals will assist Atradius with its due diligence with a view to securing ECA cover funding to assist in building a mine. The company will liaise with additional project funding institutions in parallel with Atradius to ensure the Port Gregory Project is ultimately fully funded.

Addressing the letter of support, Heavy Minerals Non-Executive Chairman Adam Schofield says: “This potential mine-building funding support from Atradius via the endorsement of Royal IHC is an important milestone in the company’s progress.

The company will continue to rapidly identify and secure its full funding options to establish a pathway to first production in 2026″

Securing a commitment to explore a material level of funding for the Port Gregory Project at this stage in the project development cycle is a clear demonstration of the exceptional value of the Port Gregory Project. The company will continue to rapidly identify and secure its full funding options to establish a pathway to first production in 2026.”

IHC Mining’s Managing Director, Hans Greve, says the organisation is very proud to have gained the trust of Heavy Minerals during the Scoping Study phase of its work program at the Port Gregory Garnet Project. 

“We look forward to continuing to support Heavy Minerals through the Prefeasibility Study phase and beyond. The IHC Mining team in Australia, combined with our global operation centres, will work together with Heavy Minerals to help develop their Port Gregory Garnet Project into a long-life and economic mining operation.

The initial study work performed by IHC Mining indicates the project has a genuine opportunity of being developed, and this is why we continue to support Heavy Minerals Limited.”

Heavy Minerals is an Australian listed industrial mineral exploration company. The company’s projects are prospective for industrial minerals, including but not limited to garnet, zircon, rutile, and ilmenite. 

Its initial focus is the Port Gregory and Red Hill Garnet Projects in Western Australia, with the Port Gregory project having a JORC (2012) Inferred and Indicated Mineral Resource of 135 million tonnes @ 4.0% Total Heavy Minerals. This includes 4.9 million tonnes of contained garnet and 220 thousand tonnes of ilmenite.

Write to Adam Orlando at Mining.com.au

Images: Heavy Minerals Ltd
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Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.