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Chieftain Metals: Finance Structure Coming Together

ByEdison
Published 11/14/2013, 02:29 AM
Updated 07/09/2023, 06:31 AM
GC
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Ratification of FS clears way for financing
Chieftain Metals Corp., (CFB) had the feasibility study (FS) for its Tulsequah Chief polymetallic project in British Columbia independently validated in September, which allowed it to move forward with detailed discussions for a proposed senior debt facility of around US$220-250m. The IMC Group Consulting technical review was required for management to negotiate terms and conditions with a bank lending group and confirmed the “positive project economics” of the proposed 2,000tpd underground operation, as outlined by the company’s Q113 FS.

Finance structure coming together
Chieftain is seeking a US$220-250m senior debt facility, which would cover around half of a US$450m capex figure at Tulsequah Chief, from a syndicate of lenders. It will add to an existing US$50m facility (US$10m drawn from a total of $US60m) from Royal Gold streaming and US$50m offered from suppliers. It is seeking a further US$100-125m from equity based sources, which will provide the outstanding capex, cover finance costs and provide working capital.

Feasibility results updated and optimised
January’s feasibility study outlined a 9.5-year, 2,000tpd operation with operating costs of US$126/t and capital expenditure of US$450m. As a zinc operation, the mine will produce 31,300tpa of metal at industry low (negative) cash costs net of by-products. The post-tax NPV was calculated at US$144m (8% discount) and the IRR was 14.7%. Chieftain has since reduced the build time from three to two years and increased the throughput from 2,000tpd to 2,500tpd, which has improved the NPV by 12.5% to US$162m and increased the IRR to 16.6%.

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