Advising on Mantos Copper financing and royalty financing for the Araguaia nickel project

05 Sep 2019

We have advised Mantos Copper S.A. on a comprehensive US$250 million financing package to expand the sulphide concentrator plant at the Mantos Blancos copper mine located in Chile.

As part of the financing, Mantos Copper has entered into definitive agreements for a US$150 million facility from Complejo Metalurgico Altonorte S.A. linked to an offtake contract, a US$50 million copper royalty agreement with Anglo Pacific Group and an enhancement to its existing silver purchase agreement with Osisko Gold Royalties. Together with committed equity funding from Orion Mine Finance (Mantos Copper’s majority shareholder), the combined proceeds will fund the capital cost of the expansion of the plant and associated working capital requirements.

John MacKenzie, the Executive Chairman of Mantos Copper, commented: “This financing represents an important milestone in the Mantos Copper strategy to extend and expand its operating mines in a capital efficient and sustainable manner. This is a significant achievement in the current market for mining finance. The expansion and extension of the life of Mantos Blancos will bring material benefit to all of its stakeholders, including employees, contractors, suppliers, customers and local communities in Chile. We are grateful to Simmons & Simmons, and our other advisers, for their support in delivering this financing.”

We have also advised Orion Mine Finance on its $25m royalty financing with Horizonte Minerals in exchange for a 2.25% royalty on the Araguaia nickel project in Brazil. This funding provides the initial capital investment to commence the early works programme and advance the fully-permitted Araguaia nickel project to construction.

Dov Lader (Deputy General Counsel for Orion) also commented: “It was great working with Simmons & Simmons on these transactions. Their experience on mining financings is invaluable and they always handle any complex issues very sensibly.”

Iain Duncan noted: “We are delighted to have assisted Mantos Copper and Orion on these financings and look forward to seeing these projects develop. These deals reflect our continued focus and expertise in advising on Energy & Natural Resources transactions across developed and emerging markets.”

The Simmons & Simmons teams were led by Iain Duncan, with our Corporate team, Isabella Roberts and Ece Aygar, our Finance team, Adam Cooper, Simon Kenolty, Shu Shu Wong, Nidhi Sahdev and Jennifer O’Kane, and our Tax team, Nick Cronkshaw, Zoe Arnautov and Ben Blackman.

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