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The USD1.1bn project financing facility is being provided by a consortium of senior lenders and a commercial bank syndicate, of USD650m and USD400m respectively, of the total facility. The first disbursement of the financing that has a term of about twelve years, is expected in mid 2009 after financial closing and satisfaction of conditions to borrowing take place. Some completion guarantees for the financing, calculated pro-rata to their ownership interests, will be provided by the Sponsors till the Project satisfies some specific completion tests. Then the financing will become non-recourse to the Sponsors. The rest of the Project's USD2.3bn total estimated capital cost that consists of working capital and finance costs is being provided by the Sponsors since the start of construction in the third quarter of 2008, pro-rata to their ownership interests.
Japan Bank for International Cooperation, Export Development Canada, which is also the Environmental Agent) and KfW IPEX-Bank are the senior lenders, while the bank syndicate consists of five Mandated Lead Arrangers and Joint Book runners, such as Bank of Tokyo Mitsubishi-UFJ (Trustee and Collateral Agent through its subsidiary, Union Bank), Calyon Credit Agricole CIB (Administrative and Documentation Agent), ING Capital LLC (Technical Agent), Mizuho Corporate Bank (JBIC Co-ordination Agent), Sumitomo Mitsui Banking Corporation (Insurance Agent) and two Arrangers, Banco Santander and Natixis.
Esperanza's copper-gold project in Chile's Antofagasta Region, is just south of the company's El Tesoro mine. It has a more than a decade and a half mine life as per proven and probable ore reserves of 583m tonnes that is 0.54% copper, 0.223 g/tonnes gold and 0.010% molybdenum. Initial production of the commercial concentrate will be at the end of 2010.
A production of an annual average of around 714,000 tonnes of concentrates that have 191,000 tonnes of payable copper, 215,000 ounces of payable gold and 1,132,000 ounces of payable silver, is expected in the first ten years of Esperanza operations. Molybdenum production should commence in 2015 at the rate of about 2,000 tonnes annually, over the next decade. Conventional, large-scale, open-pit mining techniques and conventional processing technology will be used there, similar to that at the company's Los Pelambres mine. All necessary environmental permits and approvals have been received by the Project, which is being constructed and will operate pursuant to applicable IFC environmental and social guidelines and the Equator Principles.
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