Atico Secures US$111.4 Million Financing to Advance the La Plata Project in Ecuador

en.Wedoany.com Reported - On September 30, Atico Mining announced that it had reached a US$111.4 million financing arrangement with Trafigura to advance the construction and pre-development preparation of the La Plata copper-gold project in Ecuador. This includes a US$95 million project financing facility and a US$16.4 million convertible debenture subscribed by a Trafigura affiliate. The project financing will be used by Atico's subsidiary Compañía Minera La Plata and may be drawn in tranches over approximately 2.5 years after project commencement, or at the latest from March 31, 2027 under the drawdown arrangement.

The US$95 million project financing has a term of 7 years following the end of the drawdown period, with an interest rate of adjusted Term SOFR plus 7.5 percentage points. The financing is supported by a parent company guarantee from Atico and secured by assets related to the La Plata project; the parent company guarantee will be released upon the project meeting agreed completion conditions. Each drawdown is also subject to conditions precedent and financial covenants stipulated in the agreement.

The convertible debenture has a face value of US$16.4 million, with Atico receiving net proceeds of US$16 million. The conversion price is US$0.22 per share, representing a 40% premium to the 20-day volume-weighted average price as of September 28. The debenture has a term of 5 years and 1 day, with a cash interest rate of 7% per annum, or 10% if interest is paid in shares. The proceeds from this financing will also be used to repay approximately US$3.5 million of Trafigura debt, US$6.98 million of Dundee subordinated debt, and to fund La Plata pre-construction and corporate operations.

La Plata is a volcanogenic massive sulfide project in which Atico holds a 100% interest. According to the 2024 feasibility study, the project has an initial probable mineral reserve of 2.51 million tonnes at average grades of 1.59% copper, 2.28 g/t gold, 30.41 g/t silver and 2.18% zinc; the mine has a designed life of 8.1 years and is expected to produce an average of 9.71 million pounds of copper, 15,929 ounces of gold, 226,300 ounces of silver and 13.25 million pounds of zinc in concentrate per year. The study estimates initial capital expenditure of approximately US$91 million, an after-tax net present value of approximately US$93 million, and an internal rate of return of 25.1%.

Under the full capital basis of the feasibility study, the La Plata project's life-of-mine capital cost is approximately US$141.7 million, including approximately US$91.39 million in pre-production capital expenditure, approximately US$30.07 million in sustaining capital, and other working capital and closure costs. Atico has previously advanced project engineering design and permitting work, and this US$95 million project financing substantially covers the initial construction capital requirement in the feasibility study.