Meridian Mining’s Cabacal gold, copper and silver project in Mato Grosso, Brazil, has entered the pre construction phase. The company announced on November 9 that AFRY has been awarded the engineering, procurement and construction management contract after a selection process that included extensive technical due diligence, and that its build team will operate out of AFRY’s Belo Horizonte office. AFRY’s Brazilian clients include Aura Minerals, Nexa Resources, Hochschild Mining and Ero Copper.
Meridian has committed contracts totalling $30.9 million for pre construction work, covering the EPCM contract, power transformers, off site civil infrastructure including bridges and road upgrades, a SAG mill, Jameson Cells and an IsaMill. The installation licence and access agreements for the 138 kV power line to site are in place, and a competitive process to select the power line construction contractor is under way.
On financing, the company said its outreach to banks, funds, commodity traders and export credit agencies drew more than twenty indicative proposals, several offering more than $300 million of debt, and several fully funded proposals of $400 million covering project debt, cost overrun funding, any required equity contribution and offtake and marketing services. Meridian is assessing the proposals to shortlist preferred bidders for detailed negotiation. The offers rest on the definitive feasibility study published in October, which returned a net present value at a 5 percent discount rate of $2.1 billion and an internal rate of return of 108 percent, figures the company attributes to low capital intensity, rapid payback and strong life of mine cash flows, with clean copper gold silver concentrates drawing offtake interest from traders and smelters.
The company holds a treasury of about $90 million, which it says puts it in a healthy position to advance towards the final investment decision and select its financing partners while continuing copper and gold exploration.