Panama Copper Gets $1bn Boost

Canada’s Franco Nevada has agreed to provide $1bn in funding to Inmet Mining’s Cobre Panama project in exchange for future precious metals production, it says. The funds are to be delivered over a 3-year period to the project, which has total funding needs of $6.2bn. In exchange, Franco Nevada receives a percentage of the precious metals output, indexed to copper and payable in gold and silver. Cobre Panama has received 20% equity funding from the Korea Panama Mining Corp consortium, and also raised $1.5bn in the bond markets in May. The 8.75% 2022 NC4 bond came at a 9.00% yield, via Citi, Credit Suisse, BAML, JPMorgan, Morgan Stanley and RBC. The $1bn from gold-focused royalty and stream company Franco Nevada brings the total committed funding to $4.2bn, says a person familiar with the project, and Inmet is expecting to use operating cash flow to round out the funding needs. The transaction was handled by internal advisors, say sources familiar with the deal. Cobre Panama’s first production is expected in 4Q 2015.