Euro Sun Mining (TSX: ESM) has secured a term sheet for a copper concentrate prepayment facility. The facility, entered into with Trafigura Pte, is part of an effort to secure the funding required to advance Euro Sun’s Rovina Valley copper-gold project.
Terms are said to have been “agreed in principle” for Trafigura to provide a total of US$200 million in prepayments for copper concentrate. Prepayment would occur in three tranches, with the first tranche to consist of $2.5 million that would be made available within 16 months from the first availability date upon the signing of a definitive agreement.
A further $17.5 million would then be made available under a second tranche, which may also be drawn within 16 months from the first availability date, while the final $180 million will be made available in the third tranche, which can be drawn within 18 months from the first availability date. All tranches are subject to certain terms being met, including the signing of a definitive agreement and the project being fully funded. Tranches A and B are repayable on June 30, 2027, while Tranche C will be repayable on June 30, 2031.
As part of the prepayment facility, Euro Sun has also agreed to provide offtake volumes of up to 100% of commercial production for between seven and nine years, or until minimum quantities of tonnage has been delivered, the specifics for which were not provided.
Euro Sun has also agreed to issue warrants equal to 40% of the aggregate amount drawn under Tranche A and B, with each warrant containing an exercise price of $0.50 per share and an expiry of June 30, 2029.
The first tranche of the prepayment facility is expected to be made available sometime in June 2025.
The Rovina Valley project, located in Romania, is one of the largest undeveloped copper-gold assets globally, with the project boasting proven and probable reserves of 1.8 million ounces of gold at 0.43 g/t and 208,231 tonnes of copper at 0.16%. Across all resource and reserve categories, the project is estimated to contain 7 million ounces of gold and 233,000 tonnes of copper, or roughly 10.1 million ounces of gold equivalent.
A definitively feasibility study conducted in 2022 identified the project as having an after-tax net present value of $512 million, which was based on $1,650 an ounce gold and $3.75 a pound copper. That estimate is based on a 17 year mine life, producing on average 139,000 ounces of gold equivalent annually.
Euro Sun Mining last traded at $0.125 on the TSX.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
