Earth Heat Resources with $40m additional project finance for Copahue project
Earth Heat Resources Limited mandates regional bank CIFI as lead bank and mandated lead arranger for a drilling loan of $22.5 million and signs agreement on $17.5 million in capital contingency finance with AGS Capital Group.
In a release to the Australian Stock Exchange, “Earth Heat Resources Limited announces that it has successfully mandated Corporacion Interamericana para el Financiamento de Infraestructura (“CIFI”) as Lead Bank and Mandated Lead Arranger for a Drilling Loan of US $22.5 million subject to due diligence. Further, the Company has signed an agreement for $17.5m in Capital Contingency Finance with AGS Capital Group LLC (‘AGS’).”
Highlights of the deal:
- CIFI to provide US$22.5 million debt financing for drilling loan directly and through syndication;
- Proceeds to be used for drilling 3 of the 4 wells planned for Phase 1;
- Drilling Loan to close contemporaneously with the Senior Debt,
- AGS has agreed to provide up to $17.5m AUD in Capital Contingency Funding, if required.
- Total debt for Phase 1 US$86.5 million; Earth Heat on the threshold of full funding for the Copahue Development.
The Drilling Loan and Capital Contingency Finance, in conjunction with the previously announced (ASX 24th November 2011) $134 million Project Finance Loan from Inter-American Development Bank (“IDB”) forms the debt aspects of project financing requirements for the Company’s Geothermal development at Copahue in Argentina.
Earth Heat Managing Director, Torey Marshall commented,“Securing additional funding for the advancement of the Copahue project is the achievement of an enormous milestone. We now have agreements in place with AGS, CIFI and IDB, subject to due diligence, which will more than cover the debt requirements to proceed with Phase 1 at Copahue. Our rapid progress has shown that EHR has a formidable business model and a high quality project in Copahue. We will continue to lead the ASX listed sector and over the next 6 months will provide clarity to shareholders on corporate activity, joint ventures and additional funding options to achieve the best outcome for all the Company’s shareholders and stakeholders.”
Details about the terms of the CIFI Drilling loan available via link below.
Source: Company release February 22, 2012 (pdf)