The board of Inmet Mining, parent company of Minera Panama, has given permission for the construction of a copper mine in Donoso, Colon province.
Having gathered enough funding, Inmet Mining said it will proceed with building the mining project, in which it owns 80% of the shares. The remaining 20% is owned by the South Korean government consortium formed by Korea Resources Corp. and LS-Nikko Copper Inc. who injected $1.4 billion.
J.P. Morgan, Credit Suisse, Bank of America Merrill Lynch, Citigroup, Morgan Stanley and RBC Capital Markets acted together for the negotiation of the bonds. The certificates have a rate of 8.75% and mature in 2020, Reuters reported.
"I am very satisfied with the result achieved. It was a fundamental and essential part of our funding that has been completed and we can now proceed," said Jochen Tilk, president of Inmet, according to Prensa.com.
Korean company LS-Nikko could invest up to $260 million in copper mining project "Cobre Panama".
LS-Nikko signed an option agreement with Canadian company Inmet Mining Corp, owner of the project. Under the agreement, LS-Nikko will have the option to acquire between 20% and 30% of the copper mining project "Cobre Panama" (Minera Panama S.A.), depending on how much it invests in it.
The Mining Code’s reform allows Inmet to complete financing for $ 5.000 million needed to exploit Minera Panama’s copper mine.
Specifically, the reform opened the possibility for foreign states to invest in mining projects. For Canadian company Inmet, this could translate into including Korean state company Kores, representing a project investment of $ 625 million.
The Canadian owned mining company owner is not looking for more equity partners, but will instead fund development of the mine by issuing bonds.
The reduction of risks to the project has enabled it to seek finance by issuance of debt, whose principal will mature in 2020. This will not alter, in principle, the current composition of capital, of which 80% is owned by Inmet Mining Corp.
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