Mine Loan Financing Options
Mine projects are expensive endeavors that require extensive financing. Investors weigh debt and equity when reviewing operational mining loans. Many investors are willing to collect cash flows from mining operations, which are applied towards debts’ loans. Purchase agreements can also be signed that state investors can purchase natural resources at discounted prices for specific terms.
MineLoans offers terms that are project-specific, meaning they are directly negotiated between the borrower and lender.
The borrower’s financial situation has a substantial impact on the project’s terms and the potential for successful loan closing. Borrowers with substantial equity and liquidity are generally more attractive to investors. Timelines are also critical components to loan financing.
Highly qualified borrowers that have proof of 10-percent or more in available monetary funds are stable applicants, attracting private investors. These types of higher-equity borrowers are given first consideration over applicants that are less qualified. With favorable terms to both the borrower and investor, these types of loans close quickly. Investors focus on working with borrowers that have substantial funds to back their mining endeavors.
Even if borrowers don’t have 10-percent equity, some lenders will still consider financing these projects. Most investors require from one- to two-percent of total requested funding to help cover necessary due diligence costs. These funds are eventually reimbursed to borrowers upon successful loans’ closings. Borrowers that offer diligence expenses are often fast tracked by investors, which gives their loans higher priority.
The most popular option is 100-percent financing, which is often the choice loan for mining owners that have funded projects with their own capital investments. For investors to provide 100-percent financing, MineLoans requires the involvement of a third party. This is generally a hard moneylender. The primary lender generally loans 90-percent of necessary funds and a third party vendor funds the remaining amount. Once the deal is funded, the hard moneylender is paid off and the initial investor carries the loan.
Financing projects worldwide, MineLoans is not able to provide funding for projects in countries that are in conflicts or involved in wars. General lending limits range from $5 million to $500 million.
Projects require a business plan, which includes geographic trend reports, gold assay reports and other related third-party reports. Permits and financial information are requested and reviewed prior to loan approval.
MineLoans offers loan funding for a variety of projects, including mine loans, well loans, gold mine loans, coal mine loans and natural gas loans.