Case Studies

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.

US$139m

Transaction Amount

Background
Challenges
Solutions

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

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

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

Key Contact

George Pyper

Managing Director

Paul Mainwaring

Associate Director