Boleo project financing moves forward

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07 June 2010

Baja Mining Corp has signed an agreement with Louis Dreyfus Commodities that sees the project financing of the Boleo copper/cobalt mine in Mexico move forward.

Baja Mining Corp has entered into a binding letter of intent with Louis Dreyfus Commodities Metals Suisse, setting out three transactions which, when completed, are expected to satisfy an important part of the financing package for the Boleo copper-cobalt-zinc-manganese project located near Santa Rosalia, Baja California Sur, Mexico.

Baja has a 70% interest in the project with a Korean consortium making up the remaining 30%. The final project finance package is likely to consist of a senior project debt financing of $740 million, including a cost overrun facility of $50 million. The majority of the project financing will be provided by export credit agencies, which are completing their due diligence and approval requirements, and a syndicate of commercial banks.

Further subordinated debt of $50 million will be provided to the project by Korean Development Bank, and subordinated debt of $50...

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Poll

Will Russia’s recent ban on grain exports result in a significant rise in private risk insurance claims from grain traders unable to fulfil their contracts?

Yes – there will be more claims. The government’s actions allow traders, with PRI cover, to make claims through contract frustration.

No - the majority of Russia’s wheat production, some 70%-80%, is used for domestic consumption so the contracts represent only a small portion of the total wheat market, limiting the amount of potential claims.

23%

No - traders had a week’s notice before the ban allowing them to secure alternative supplies to fulfil contracts stated as optional origin.

23%

Maybe - but claims are likely to be limited to traders dealing in soft wheat whose contracts demand they source wheat only from Russia.

46%