Finders signs up offtake partner

COPPER developer Finders Resources has signed an offtake agreement with its lender Standard Bank for the Wetar copper project in Indonesia, with 100% of production now committed.
Finders signs up offtake partner Finders signs up offtake partner Finders signs up offtake partner Finders signs up offtake partner Finders signs up offtake partner

Standard will subscribe for a $US5.5 million ($A5.2 million) mandatory convertible note which can be converted into Finders shares at the end of six years or earlier at a conversion price of A42.7c per share.

In return, Standard will have the right to buy up to 40% of copper cathode produced at Wetar at prevailing market prices.

The bank has also committed to subscribe for a further tranche of $5.5 million in an equity raising to be launched to fund the construction at Wetar.

Standard's participation in the raising will secure it the rights to an additional 20% of Wetar copper offtake.

Tennant Metals is marketing agent for 40% of copper cathode produced, meaning Finders has now secured partners for all planned production.

In December, Finders received bank approval for a $138 million funding facility for the Wetar development, with Standard acting as one of three lead arrangers.

Finders managing director Chris Farmer said today's announcement further strengthened the relationship between the company and Standard.

"Standard Bank is a respected international bank and is experienced in funding resource projects around the world," he said.

"They have made a significant long-term commitment to Finders through both debt and equity funding, after extensive due diligence and review."

Total capital costs for the stage 1 expanded demonstration plant and stage 2 main plant are expected to be $155 million including an accuracy provision of $17 million.

The existing 1825 tonnes per annum demonstration plant will be restarted within three months of a board decision to proceed.

Production will ramp up to 7000tpa, with commissioning of the expanded demonstration plant around 10 months after the start of construction activities.

Full capacity of 25,000tpa will be reached with re-commissioning of the Whim Creek plant around 20 months after the start of construction activities.

Based on the bankable feasibility study, the post-tax, net present value of Wetar is $304 million.

The company is in the final stages of obtaining a forestry permit.

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