Mar 25 2013
International Minerals Corporation is pleased to announce that a $140 million term loan facility agreement with a consortium of Peruvian banks has been signed by Minera Suyamarca S.A.C. ("Suyamarca") to provide partial financing for the capital costs required to complete the development and construction of the Inmaculada gold-silver project located in Peru.
Suyamarca (60% Hochschild Mining plc ("Hochschild"), 40% IMZ) owns 100% of the Inmaculada project and the Pallancata silver mine, also in Peru. Hochschild is the operator of both properties.
The $140 million loan facility (the "Loan Facility") has a term of seven years with no principal payable for the first two years. The interest rate is based on the 3-month LIBOR rate plus 3.0%, with customary closing fees and charges. Interest will be payable quarterly during the term of the loan. The loan will be non-recourse to both Hochschild and IMZ.
The Loan Facility combined with Hochschild's initial $100 million contractually-required funding of the development and construction cost, means that IMZ's remaining capital contributions to complete its share of the $370 million Inmaculada project are estimated to be $56-$58 million, of which $8 million was contributed by IMZ in November, 2012. IMZ anticipates that funding of its remaining project capital commitment of $48-$50 million might commence in the final calendar quarter of 2013 (approximately $10-$12 million) with the balance funded in the first half of 2014. Such funding is expected to be provided from IMZ's working capital.
Suyamarca commenced development of the Inmaculada project in January 2012 and it is anticipated that commercial production should commence in the second half of 2014, assuming that all permits and capital equipment are received within the current timeline. Based on a feasibility study announced in January 2012, the Inmaculada mine would be a low-cost producer with an initial mine life in excess of six years (using only the current proven and probable reserves) and annual production (on a 100% basis) of approximately 124,000 ounces of gold and 4.2 million ounces of silver.
General
The technical disclosure in this news release has been reviewed by IMZ's Qualified Person, VP Corporate Development, Mr. Nick Appleyard.
Hochschild Mining plc does not accept any responsibility for the adequacy or inadequacy of the disclosure made in this news release and any such responsibility is hereby disclaimed in all respects.