• London
  • Vancouver
  • Camana Bay

US$139mTransaction amount

Dannemora Iron Ore Project / Dannemora Mineral AB

Structure and arrangement of secured bond financing and leasing facilities for the Dannemora iron ore project in Sweden.

Background

Endeavour advised Dannemora on the financing of the US$139 million Dannemora iron ore project in Sweden. The project was the restart of a former producing mine that closed in the 1990’s. The financing was only the third ever greenfield project bond where bondholders took construction risk.

Comprehensive advisory role including:
  • Reviewing financing plan, contractual structure, technical work
  • Advice on offtake contracts
  • Negotiation with bond managers
  • Negotiations with European lending institutions in parallel to bond solution
  • Financial modelling, term sheet and documentation negotiations

Key Contacts

George Pyper

Managing Director


Paul Mainwaring

Associate Director


Challenges

  • Junior company sponsorship
  • New entrant into debt market
  • Bond market unpredictable as to its availability
  • Offtake progress was slow; delaying the bank financing route
  • Additional technical work was undertaken to ensure the technical review met international banking standards

Solutions

  • Bank financing route progressed in parallel to bond financing (bank presentations; modelling; term sheet negotiation)
  • Comprehensive cost-benefit analysis of bond versus bank route; presentation to sponsor board
  • Bond route did not require offtake arrangements to be finalised due to education of bond manager/investors with respect to progress (trial shipments; LOIs etc)
  • Extensive preparation of due diligence including lender-ready independent review
  • Protection for investors for cost overrun risk achieved without compromising benefits to sponsor of favourable covenant structure

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