Sumatra Copper mandates Nomura to arrange loan

By Romel S. Gurky

ASX-listed Sumatra Copper & Gold Limited announced that on Sept. 11, the company mandated Nomura Singapore Limited to arrange a funding package for a subsidiary of the company to develop its Tembang gold project in southern Sumatra.

The financing is expected to include higher levels of debt funding, equity compensation and a gold hedging facility.

The company considers the terms being negotiated with Nomura to be more advantageous to shareholders than those previously announced by the firm.

The company also advised that is has signed a variation of the Convertible Loan Facility Agreement dated Dec. 4, 2013 with major shareholder Provident Minerals Pte Ltd to increase the Convertible Loan Facility by US$500,000 to US $6,100,000. The additional US$500,000 is intended to be drawn down for the purpose of providing the company with working capital through to the anticipated funding of the project.

On July 3, 2014, the firm announced that it was in the process of seeking credit committee approval with an internationally recognized bank for approximately US$21 million of senior secured debt facilities with a $2.5 million cost overrun facility as part of funding plans for its Tembang gold project.

The total funding package for the development of the project is US$45 million of which $21 million is expected to be funded with the facility and $24 million is expected to be funded with equity, the company explained.

Editing by Johannes Simbolon