It took the company a while but Almonty Industries (AII.TO) has now finally received a binding commitment letter from KfW IPEX-Bank to the tune of US$76M to fund the construction activities of the Sangdong tungsten mine in South Korea.
And we have to say we are quite impressed with the final terms of this agreement (and it was clearly worth waiting for). The interest rate is very low at 3M LIBOR + 2.5% and Almonty expects to reduce the cost of debt even further. But considering the current 3M LIBOR interest rate is just 1.74%, the current cost of debt is just 4.24% and that is very low for a mining project.
The loan will mature 6 years and one quarter after the issuance date and the quarterly installments will only start after the second anniversary of the initial drawdown which confirms the repayment holiday during the construction period. The tungsten price is currently holding in there at $240/mtu for APT and we expect Almonty to hit the ground running soon.
Disclosure: The author has a small long position in Almonty Industries.