Finders Resources has reached a funding agreement that will reduce debt and sustain operations at the Wetar copper project in Indonesia.
The lenders include the Commonwealth Bank of Australia (CBA), Societe Generale Hong Kong, BNP Paribas and the Hong Kong and Shanghai Banking Corporation.
Indonesian copper consortium Eastern Field Developments, jointly owned by Indonesian companies Provident, Saratoga and Merdeka, became the majority shareholder of Finders in March.
The agreement releases $US4.5 million ($6.1 million) from the debt service reserve account (DSRA) of Finders’ subsidiary PT Batutua Tembaga Raya (BTR) to pay principal and interest owed by the company by June 30.
This reduces the balance of the DSRA from $US13.5 million ($18.3 million) to $US9 million ($12.2 million).
Under the revised arrangement, BTR will arrange an unsecured shareholder loan with Eastern Field for $US19 million, including a drawdown of $6 million on or before July 16 and a further $6 million on or before July 31 for a $12 million total.
The new arrangement is expected to increase the value of the Wetar project in the long term and allow it to sustain operations.