Lepidico has been working with finance advisor LHGP since December 2019. LHGP has specialist capabilities in the key areas for the Phase 1 Project, being Africa, the UAE, Europe and the United States. Soft soundings of prospective debt providers were completed during the year, which led to a target debt range of 60% to 70% of the total funding requirement for the integrated Project.
Engagement with commercial banks, DFIs and export credit agencies (ECAs) is ongoing in fiscal 2021 for the Project debt. Particular interest is being shown by organisations that lend to developing countries. Strategic investors are favoured for the equity finance component.
In October 2021 Lepidico entered into a formal mandate (Mandate) with the United States International Development Finance Corporation (DFC) to undertake an in-depth analysis and evaluation of the Karibib Phase 1 Project (Phase 1 Project) for the purpose of determining whether the Phase 1 Project qualifies for DFC financing. This follows receipt by the Company of an indicative, non-binding term sheet from DFC in respect of the requested debt funding for the Phase 1 Project in Namibia.
Under the Mandate, the DFC will undertake detailed due diligence to ensure the Phase 1 Project meets DFC’s criteria, including DFC’s requirements regarding the Phase 1 Project’s creditworthiness, its developmental benefits to Namibia, and its effects on the environment. The Phase 1 Project encompasses the re-development of the open pit mines at Rubicon and Helikon 1, the development of a new mineral concentrator and working capital through to commercial operation.
The Integrated Project will have operations across two jurisdictions: Namibia and Abu Dhabi; and potential o take partners across further jurisdictions resulting in various regulatory and fiscal regimes. The structure of the Integrated Project therefore requires separate legal entities to be established in each operating jurisdiction, which in turn has led to a split finance structure being contemplated.