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Project financing - mining and resources group

Case study - July 2012

Abstract

Deloitte successfully secured the financing by 'bridging the gap' between the entrepreneurs and the financiers. The Deloitte team used their extensive technical and industry expertise to proactively educate the financiers on the relative merits of the project as well as the fundamentals of the technology.

Challenge

Deloitte was approached to manage the project financing for the initial phase of a significant mining and resources operation, the first of its kind in Australia.

Deloitte acted as lead adviser in the marketing to potential senior and mezzanine lenders. Our client lacked the structure and project plan necessary to market the project to financiers.

Due to the early stage of the project, our client required a form of mezzanine debt, which is typically more difficult to source than vanilla senior debt.

With limited debt capital markets expertise, our client did not want to align with one financier, which would reduce its flexibility and impose onerous pricing constraints.

Approach

Deloitte developed a detailed project plan that provided structure to the overall project.

We developed a fully costed financial model that would be used for budgeting as well as marketing to potential financiers.

Deloitte managed the marketing approach to financiers, allowing management to focus on the project and creating pricing tension.

Solution

Our client secured mezzanine financing for the growth phase in the order of $20 million and now has the platform, and funding, in place to roll out the initial phase of the project.

By securing the mezzanine funding our client is in a strong position to secure additional (senior) funding at competitive rates as the project develops.

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