In-ground assets can now be leveraged to finance mining operations

In-ground assets can now be leveraged to finance mining operations

A revolutionary financing package providing cash-starved mine and other in-ground asset owners the capital needed to start operations is now available through the UK-based Project Finance Exchange (PFX). 

The financing is based on the long-established arbitrage trade structure now used by major institutions including JP Morgan, Blackrock and other leading hedge and alternative investment funds to generate consistent profits.

Arbitrage trades involve the simultaneous purchase and sale of assets in different markets such as stocks, commodities and currencies, to exploit tiny differences in their prices.

Because the trading margins are so small, albeit virtually risk-free, it is necessary to invest tens or hundreds of millions of dollars or euros into a program to realise a profit, which is why it has always been exclusive to major institutions and the ultra-wealthy.

For cash-starved mine owners the new package from PFX monetises the in-ground assets to provide the level of funding necessary to initiate an arbitrage trading program in order to finance mining operations.

Arbitrage trading adapted for the global mining market (In-ground assets can now be leveraged to finance mining operations)

Arbitrage trading, originally developed to fund major reconstruction projects after World War II, has now been adapted for the global mining market.

This unique financing structure first leverages (monetises) the proven in-ground assets, and then uses the proceeds to start an arbitrage trading program which delivers the funding requirement.

There have been thousands of these programs since John Maynard Keynes first created the structure and introduced it at the iconic Bretton Woods conference in 1944.

Also known as private placement programs (PPP), over eight decades they have been used to fund thousands of major construction, industrial and infrastructure projects worldwide.  None have ever failed.

Monetising in-ground assets (In-ground assets can now be leveraged to finance mining operations)

However, the challenge for those entering an arbitrage trading program has always been to find the ‘placement’ capital needed to initiate the trades.

Uniquely, for mine and other in-ground asset owners, this has now been overcome by monetising the proven in-ground assets and using the proceeds to start the trades.

This enables thousands of asset-rich but cash-poor mine owners worldwide to start operations.  The financing structure can be applied across all types of minerals and other in-ground assets.  As income from the trades is regarded as profit, and not a loan, it is subject to tax in the usual way.  However, as it is profit there is no debt or equity liability.

To initiate the financing the investor requires:

• NI 43-101, JORC or similar (no more than 12 months old)
• SKR with reputable depositary (investor prefers Brinks)
• Full and comprehensive project plan to include all permits, permissions, financials, contracts etc.
• Minimum financing requirement USD150,000,000.
• Lawyers letter attesting to the mining rights.

The UK-based Project Finance Exchange (PFX) enables projects and investors worldwide to seamlessly identify, connect and engage with each other across all market sectors.  PFX has over USD300-billion of investable capital from its registered investors.

According to PFX CEO, Richard Osmann the long-established arbitrage trade structure has financed thousands of major infrastructure, industrial and construction projects over the eight decades since it was first introduced by John Maynard Keynes way back in 1944.

“Now adapted to the mining sector, it transforms the financing landscape for thousands of cash-strapped mine owners worldwide.

“The investor needs a stable political environment and strong, seasoned management team in order to take projects forward.  Even better, there’s no cost to the mine owner other than for a site visit from the investor.  We look forward to getting as many currently dormant, cash-starved mines operating as soon as possible,” says Osmann.

To start their financing process, mine owners can contact PFX through the contact zone at www.projectfinanceexchange.com (or Google: ‘PFX Projects’).

In-ground assets can now be leveraged to finance mining operations

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In-ground assets can now be leveraged to finance mining operations