What makes a mining project-financial options

CIM Bulletin, Vol. 73, No. 822, 1980

R.R. STONE, Vice-President, Finance, Cominco Ltd. Vancouver, B.C.

This paper will examine the role of debt and equity in project financing and will illustrate the impact on the return to the project sponsor of each type. Conventional debt sources will be examined, as will product purchaser advances, foreign export-import bank loans and lease financing. The paper will review guarantees, charges against the project, dividend restrictions and other commitments. It will also discuss various features of sales contracts and the degree to which they can assist in securing financing.
Keywords: Mineral economics, Financial options, Mine design, Debt, Equity, Leasing, Project financing.