Verdant Minerals Ltd (ASX:VRM) has received a non-binding indicative term sheet for a long-term concessional debt facility of up to $160 million from the Northern Australia Infrastructure Facility (NAIF).
The term sheet will be used to advance the company’s Amaroo Phosphate Project in the Northern Territory including the execution of offtake contracts and detailed due diligence.
Verdant is also in the final stages of concluding Amaroo’s native title agreement, having met with native title holders at Ampilatwatja on 30 October to seek an arrangement for its proposed compensation package.
The company understands the title holders have accepted the proposed terms and the registered native title body has passed resolutions to enter into the agreement.
Verdant and the Central Land Council are concluding final drafting details and it is expected the NT Government will be in a position to grant Amaroo’s mineral leases once the agreement is signed.
Verdant managing director Chris Tziolis said the NAIF debt facility was a significant milestone for the project.
He said: “[It] will assist in facilitating and enhancing ongoing discussions with providers of commercial debt, potential customers and development partners.
“Verdant Minerals is appreciative of the opportunity to work with NAIF on the development of the Amaroo Phosphate Project.
“The issuance of the indicative term sheet and NAIF’s support to provide a long tenure concessional loan, subject to meeting the conditions precedent, will secure a significant portion of the project’s debt funding.
“We wish to thank NAIF for their indicative support and we look forward to working with them over the coming months as we work to meet the conditions in the indicative term sheet and move towards a final investment decision.”
As part of the NAIF facility Verdant will also be required to: finalise terms for senior debt funding; secure the balance of equity funding; conclude a cost-benefit analysis; show evidence that all environmental, native title and regulatory approvals are in place; negotiate and execute project and facility documentation; and receive final NAIF credit approval and a board investment decision.
NAIF chief executive officer Laurie Walker said the NAIF’s support was to assist Verdant advance its discussions with other project counterparties and to satisfy conditions required to secure NAIF finance.
She said: “This is a demonstration of how NAIF can work with stakeholders to help them understand how its concessional financing can support the development of a project which has the potential to provide substantial benefits to Northern Australia and the Northern Territory.”
Amaroo is close to necessary infrastructure
Verdant has completed a feasibility study for producing an initial 1 million tonnes per annum of phosphate rock concentrate, followed by a subsequent expansion to 2 million tonnes after year five.
Ammaroo contains ultra-low cadmium rock, ideally suited as feedstock to produce phosphoric acid.
The resource is shallow, free-digging, moderate-grade phosphate ore resulting in very low mining costs.
Verdant has developed a mine plan for 20 years of mining utilising less than 10% of the known resource.
This is likely to expand to 50-plus years of operation.
The regional exploration potential is significant and may underpin a major phosphate province.