China Construction Bank contributes $18.75 million USD to a $207 million USD syndication loan for the Phu Kham Copper-Gold Project

On June 26, 2007, financial close was reached on a deal in which a four-bank syndicate entered into a $207 million USD syndicated debt facility agreement with PanAust Limited for the Phu Kham Copper-Gold Project. Then, on August 10, 2007, syndication of the loan to six further banks, including China Construction Bank Corporation (CCB), was completed. The $242 million USD loan consisted of a $160 million USD construction facility an interest rate based on a floating rate plus a margin of 250 basis points (bps) and a $25 million USD cost overrun facility with an interest rate based on a floating rate plus a margin of 325 bps, a $20 million USD working capital facility with an interest rate based on a floating rate plus a margin of 200 bps, and a $2 million USD letter of credit facility with an interest rate based on a floating rate plus a margin of 200 bps. On completion, the construction facility would convert into a two-tranche term loan facility with a $110 million USD Tranche A with an interest rate based on a floating rate plus a margin of 225 bps with a December 2014 maturity and a $50 million USD Tranche B with an interest rate based on a floating rate plus a margin of 285 bps and a December 2014 maturity; Tranche B had a cash sweep whereby 75% of exceed cash flow would be applied to reduce the facility, with Tranche A benefiting from 45% of excess cash flow after the Tranche B cash sweep was applied. The debt was covered by private political risk insurers. CCB contributed $18.75 million USD. In addition to CCB, the following lenders contributed the respective amounts: Australia and New Zealand Banking Group (ANZ) ($37 million USD), BCEL ($10 million), National Australia Bank ($25 million USD), DZ Bank ($25 million USD), Standard Chartered ($25 million USD), Fortis ($18.75 million USD), KBC ($26.25 million USD), KfW ($11.25 million USD), and Sumitomo Mitsui Banking Corporation (SMBC) ($10 million) USD. In March 2007, ANZ launched the early bird syndication for PanAust Limited's Phu Kham Copper-Gold Project. The early banks in the facility were BCEL (a government-owned Lao bank), DZ Bank, nabCapital, and Standard Chartered, which were also allocated a pro-rata apportionment of the hedging. The greenfield Phu Kham Copper-Gold Project is located in Vientiane Province, 120 kilometers north of the capital Vientiane. After feasibility studies by Ausenco in 2005, the mine was forecasted to have a 12 million tons per year capacity with a sales and agency agreement in place with BHP Billiton. Ausenco was the engineering, procurement, and construction (EPC) contractor).

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