Avanti Mining Inc. (TSX-V:AVT) has secured a $40 million loan to finance the preconstruction needed to restart an idled molybdenum mine in Kitsault, B.C.
Avanti announced this morning it has entered into a binding and committed term sheet with Resource Capital Fund VI L.P. for a US$40 million preconstruction loan.
The money will be used to replace the Nass River bridge, expand Avanti’s worker camp, improve communications infrastructure, re-energize a power line, and conduct detailed engineering reports.
"The new financing is intended to provide Avanti with sufficient working capital to conclude the arrangements for debt, strategic partner and equity financings to fully fund the Kitsault development,” said Avanti CFO A J Ali. “It demonstrates the company's and RCF's positive long-term view on the molybdenum market and the robust economics of the Kitsault project."
The $1 billion project would employ up to 700 people in the construction phase and 300 on an ongoing basis.
The Kitsault mine opened in the 1970s, creating the town of Kitsault overnight. But it shut down a few years later, after molybdenum prices fell, and Kitsault was abandoned. Demand for molybdenum, which is used in steel-making, has increased, due largely to demand in China.
