Canatuan mining firm taps BNP Paribas for $40-M bond offering

ZAMBOANGA CITY, Philippines — Canadian-backed TVI Resource Development Philippines, Inc. has partnered with BNP Paribas to raise a $40-million fund through a bond sale to support two mineral projects in the Zamboanga Peninsula. "BNP Paribas will act as the lead arranger, on a best effort basis, for purposes of an international offering of debt securities of up to $40 million aggregate principal amount to be marketed outside of the United States, and to assist the mining company in structuring the terms of the associated notes," a company statement said. "[TVI Resource] and BNP expect to negotiate the final terms of the offering in light of prevailing market conditions and the circumstances of the offering at the relevant time. The offering is subject to a number of conditions, including the completion of due diligence, receipt of required regulatory approvals and the negotiation of formal documents," the mining company said. If the offering is successful, the fund will be used to complete the development of the $23-million Canatuan Sulphide Expansion Project in Zamboanga del Norte. Fresh funds will also help advance exploration efforts for the Balabag Epithermal Gold and Silver Project in Zamboanga del Sur. Part of the funds will also be allocated for general exploration and working capital, including the repayment of outstanding debt, the company said. The mining company, which has ended its $25-million Canatuan gold and silver project, has been seeking partners to "reduce the company’s working capital deficiency." The partners should be able to help fund zinc and copper extraction from the same pit in Canatuan, which is expected to yield $3 million in monthly cash flow in the next four years. In February, Atlas Consolidated Mining and Development Corp., which initially expressed interest to join TVI Resource Development in its sulphide project, opted not to participate, saying that it would instead treat a P42-million advance it had made to TVI as a secured six-month loan. TVI Resource Development has also entered into an agreement with Hong Kong firms LIM Asia Arbitrage Fund, Inc. and LIM Asia Special Situations Master Fund Ltd. for $15-million in bridge financing for the sulphide project, which is about 80% complete, company officials said earlier. — Darwin T. Wee, BusinessWorld