Cupric Canyon’s Khoemacau, a private equity firm said it has secured $565 million of funding for the construction of its copper and silver mine in Botswana.
Botswana, a sparsely populated country is the world’s top diamond producer by value, but the government of the southern African country is trying to diversify the economy to reduce its dependence on the precious stone.
Red Kite Mine Finance provided a $275 million senior debt facility for the Khoemacau Copper Silver Project, while an advance payment of $212 million was made by Royal Gold for 80 percent of the silver produced from Khoemacau until “certain delivery thresholds” are met.
A statement said Royal Gold, a subsidiary of Royal Gold Inc, would at Cupric’s option, pay up to an additional $53 million for the remaining 20 percent of the silver produced at the mine. It was also revealed that the company would pay 20 percent of the spot price of silver for each ounce delivered and will make available up to $25 million of subordinated debt towards the end of project development to fund potential cost overruns.
Khoemacau Copper Mines said that the first copper concentrate production was expected in the first half of 2021, with initial annual output averaging 62,000 tonnes of copper and 1.9 million ounces of silver.
The Chief Executive Officer of Khoemacau Copper Mines, Johan Ferreira said “securing the project funding package by partnering with two of the industry’s leading global providers of mine finance, Royal Gold and Red Kite, allows us to move forward energetically with all project development activities”.
Construction of Khoemacau was meant to start in 2017, but it was held up by delays in acquiring environmental permits as well as uncertainty around power supply.