Queensland Pacific Metals Ltd (ASX:QPM) has made strong debt financing progress targeting international export credit agencies and other government-backed lenders for its TECH Project in northern Australia.
This process has included ongoing discussions with Export Development Canada (EDC), Canada’s export credit agency, for the potential provision of debt funding for the TECH Project for up to A$200 million.
In addition, QPM remains in active discussions with Australian and other international government agencies, as well as other commercial lenders.
The company has recently appointed independent consultants who will be assisting the lenders in their due diligence on the TECH Project.
Debt financing strategy
QPM’s debt financing strategy has been to target a debt syndicate largely consisting of government-backed lenders led by Australian agencies, Export Finance Australia (EFA) and the Northern Australian Infrastructure Facility (NAIF).
The non-binding letter of interest received from EDC demonstrates continued progress by QPM on its debt financing initiatives which has already resulted in:
- $250 million indicative financing letter of interest received from EFA;
- Completion of strategic assessment phase for NAIF; and
- Indicative letter of interest and support received from Korea Trade Insurance Corporation (K-Sure).
RPM Global has been formally appointed as the independent technical expert for the debt syndicate and has begun its technical due diligence on the TECH Project.
Meanwhile, CRU Group has been appointed as the independent market consultant and will be producing a detailed report on the nickel and cobalt sulphate markets.
Potential EDC funding
Based on its initial analysis and discussions with Canadian companies, EDC has provided a non-binding letter of interest to QPM for support to the TECH Project by lending up to A$200 million as a direct lender over an indicative tenor of nine years.
EDC’s interest is in relation to potential equipment and services supplied by Canadian companies for the construction of the TECH Project.
It is the official export credit agency of Canada and is dedicated to helping Canadian businesses make an impact at home and abroad.
EDC has the financial products and knowledge Canadian companies need to confidently enter new markets, reduce financial risk and grow their business as they go from local to global.
The provision of financing by EDC is subject to the successful completion of its due diligence process and typical project finance conditions such as security, debt serviceability and equity financing.
Green production facility
Once operational, the TECH Project will be a carbon-negative, sustainable, clean and green production facility.
This will position QPM as an attractive supplier of key chemicals to the electric vehicle and energy storage industries.
The company completed a pre-feasibility study for the TECH Project in early 2020 and a definitive feasibility study is underway.