Finders executes Daewoo funding agreements

By Romel S. Gurky

ASX-listed copper producer Finders Resources Limited announced on Friday it has entered into a number of agreements with Daewoo International Corporation on funding for the former?s copper project on Wetar Island, Maluku province.

The agreements are intended to give effect to US$45 million of funding to be provided by Daewoo to Finders? Wetar Copper Project, as announced on May 12, 2014. The funding is project level equity and loans to expand the Wetar plant from its current capacity of 3,000 tons per annum (tpa) of copper cathode to 28,000 tpa. The expanded plant is expected to be commissioned in the second half of 2015.

Under the agreements, Daewoo will subscribe for shares in and provide loans to Finders? wholly owned Indonesian subsidiary, PT Batutua Tembaga Raya (BTR). Daewoo will acquire an economic interest of 24.1% in BTR in exchange for $45 million project funding. Key points of the financing are:
? Daewoo?s economic interest will commence at 24.1% but may vary between 24.1% and 27% if certain defined Indonesian taxation, regulatory or royalty changes occur in the future.
? As a 24.1% shareholder of BTR, Daewoo will be entitled to appoint two representatives to BTR?s Board of Directors and one representative to its Board of Commissioners.
? Closing of the subscription and loans is subject to certain conditions being met, including approval by the Indonesian Investment Authority, BTR entering into a satisfactory Design and Construct contract in relation to the expansion project and execution of the Senior Facility Agreement. Finders expects the remaining conditions precedent to be met this quarter.
? The agreements include an Offtake Agreement in relation to 20% of cathode production from the Project. On closing, Finders will have secured offtake partners for 100% of its cathode production.
? BTR will also enter into a Procurement Agreement with Daewoo under which BTR will be able to access Daewoo?s procurement and technical expertise for the benefit of the project. BTR is already working with Daewoo in relation to a number of opportunities.

Finders? Managing Director Barry Cahill said ?We are looking forward to working with our new partner Daewoo as we bring the Wetar Copper Project into commercial production. We believe the current project is just the beginning of the opportunities for Daewoo and Finders to work together.?

Daewoo?s Senior Vice President Kyu-Jin Jung said ?We are very pleased to participate in the Project and to work together with Finders to make this Project successful. The Project, we believe, is a stepping stone for the long and prosperous partnership between Finders and Daewoo.?

Finders is a proven low cost copper cathode producer, now fully funded and developing a high-grade 28,000 tpa copper mine on Wetar Island, where Finders has commenced mining and copper cathode production. This project is a high-grade, open pit with a 8.9Mt @ 2.4% Cu reserve and a 1:1 strip ratio. The company has an operational plant capable of producing 3,000tpa copper cathode through sulphide heap leach SX-EW. This plant has validated the economics of the Wetar project, as detailed in the revised November 2013 Bankable Feasibility Study, which includes project cash costs of $US0.88 a pound copper at efficient production levels ($1.05/lb life of mine). The company intends to add 25,000tpa to copper cathode capacity via the refurbishment and re-assembly of the former Whim Creek plant and the building of associated leach pads and infrastructure.

Finders also has a highly prospective, advanced gold-silver exploration project in Sumatra.

Editing by Johannes Simbolon