Ascendant secures OPIC loan for Honduras expansion
Toronto-based miner Ascendant Resources has secured financing from a US government agency that helps businesses invest in emerging markets to expand its El Mochito zinc/lead/silver mine in Honduras.
The nonbinding term sheet with Overseas Private Investment Corporation (OPIC) is for a $35-million project loan, the TSX-listed company said on Wednesday, noting that it would be sufficient to cover the total financing requirements for the expansion programme, including mine development expansion, a new underground shaft, underground water pumping upgrades and mill upgrades.
“This non-dilutive financing represents a significant step for the company, as once the expansion programme has been completed, it will structurally reduce the all-in cost base for the El Mochito mine that should enable profitability in almost any reasonable commodity price environment. We are also very pleased that the OPIC financing is structured to provide all necessary funds for the expansion project, while not encumbering the company with a significant financial burden over the short term,” said Ascendant president and CEO Chris Buncic.
The December 2018 preliminary economic assessment (PEA) for the expansion and optimisation of operations at its El Mochito mine outlines a project internal rate of return of 58%, with a payback period of just under two years. The project development capital expenditure is estimated to be $32.8-million.
The expansion should reduce the average all-in sustaining costs to $0.97/lb of payable zinc equivalent and significantly increase production to 120-million pounds a year of contained zinc equivalent.
The PEA assumes a mine life of ten years inclusive of inferred mineral resources and is based on the current mineral resource estimate, not including any of the 30 000-m drill programme carried out in 2018.
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