The funding consists of a US$125-million term loan and a US$50-million revolving line of credit.
The Bank of Nova Scotia spearheaded the financing, with the help of Barclays Capital, Bayerische Hypo-und Vereinsbank, Deutsche Bank, Dresdner Kleinwort Benson and Toronto Dominion Bank.
The loan will carry an interest rate of as much as 1.75% over the London Inter Bank Offered Rate, depending on the company’s ratio of debt to operating cash flow. Stillwater expects to draw down the loan over two years, amortizing it over the next five. The revolving line of credit matures in seven years.
Expansion efforts carry a price tag of US$385 million. The company has earmarked US$75 million for the Stillwater mine, while development of the East Boulder project, 13 miles to the west, calls for a capital cost of US$270 million. Another US$40 million will be used to upgrade and expand the smelter and refinery at Columbus, Mont.
The company has an additional US$67 million, which it raised in an October equity offering. The balance of the capital costs for the expansion will come from cash flow. Through 1998, Stillwater has already spent US$35 million.
The company expects to reach a production rate of 1.2 million oz. platinum and palladium annually by the end of 2001. In the first year of expanded production, the Stillwater mine should crank out between 700,000 and 725,000 oz., whereas East Boulder is expected to contribute between 450,000 and 500,000 oz. Cash costs will likely range between US$140 and $160 per oz.
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