Macquarie Bank syndicate to provide finance facilities for Herald's Dairi project

Australian mining firm Herald Resources Limited said Friday it had mandated a syndicate headed by Macquarie Bank Ltd to provide senior finance facilities for the development of the high-grade Dairi Zinc/Lead Project in North Sumatra.

Herald said the banking syndicate is comprised of Macquarie Bank (lead arranger), Bayerische Hypo-und Vereinsbank AG, Standard Bank London Ltd and South Africa-based RMB Resources Ltd

?An indicative terms sheet has been negotiated with the above syndicate, who will undertake formal due diligence with a view to providing final credit-approved facilities. The mandate above is also subject to ratification at the next project joint venture meeting,? Herald said in a statement.

According to the statement, some key project parameters from the Feasibility Study, based solely on mining of the Anjing Hitam deposit, are as follows:
- Initial mine life of 7 years
- Diluted mined head grades of 14.6% Zn, 8.8% Pb (21% Zn equivalent)
- 1mtpa production rate, utilizing underground mining with paste back-fill
- Conventional flotation treatment process, producing 220,000 and 100,000 tonnes of zinc and lead concentrates p.a. at full production
- Cash operating costs of 30c per pound zinc produced

Herald added that discussions were continuing with smelters and trading groups to provide subordinated debt and offtake facilities, while the permit approvals process in Indonesia is also in progress.

Herald holds an 80 percent interest in the project, while the remaining stake is held by state-owned diversified mining company PT Aneka Tambang. (Robert)