Canadian mining company Avanti has entered a debt financing mandate letter with six lenders for a US$612mn secured debt facility to further develop the Kitsault molybdenum mine in British Colombia.

The syndicate of six lenders includes BNP Paribas, Caterpillar Financial Services, Mizuho Bank, Unicredit, Export Development Canada and Korea Development Bank.

The facility includes US$500mn in senior debt to be repaid over 10.5 years, US$42mn in equipment financing for a five-year term and a US$70mn standby loan, to be drawn in the event of overrunning costs, for a period of eight years. The facility will have a Libor-based margin with either quarterly (for equipment finance) or semi-annual loan repayments.

Avanti will include an equity financing component to the facility, pursued either by the onward sale of silver production (silver streaming) or investment from a strategic partner.

“We welcome the financial support of our banking partners and we can now focus on advancing equity funding options to complete our initial construction capital requirement for Kitsault,” says Avanti president and CEO Gordon Bogden.

Avanti took control of the formerly-closed Kitsault mine, on the Alice Arm in the Skeena mining division of British Colombia, in 2008. An off-take agreement for 50% of total molybdenum production from Kitsault has been agreed with Germany’s ThysssenKrupp, and a concentrate processing agreement has been agreed with Chile-based Molymet.

Final credit approval of the facility is anticipated for September 2014.