How Medallion Metals Secured US$50M and a 7-Year Offtake with Trafigura
Medallion Metals has partnered with global commodity trader Trafigura to secure up to US$50 million in funding and a 7-year copper and gold offtake agreement, advancing its Ravensthorpe Gold Project development.
- US$50 million senior secured prepayment facility arranged with Trafigura
- 7-year copper concentrate and gold dore offtake agreements included
- Facility features no commodity price hedging requirements
- Funding supports Ravensthorpe Gold Project and Forrestania processing operations
- Due diligence and feasibility study underway with definitive documentation pending
Strategic Partnership with Trafigura
Medallion Metals Limited (ASX – MM8) has taken a significant step forward in financing the development of its Ravensthorpe Gold Project and associated processing operations at Forrestania by selecting Trafigura Pte Ltd as its exclusive partner for a senior secured prepayment facility and offtake agreements. This collaboration not only secures up to US$50 million in funding but also establishes a 7-year commitment for the purchase of copper concentrate and gold dore produced from the project.
Funding Terms and Project Implications
The proposed facility, subject to customary conditions including due diligence and approvals, is structured with a one-year grace period followed by a three-year repayment term. Notably, the agreement does not impose commodity price hedging requirements, offering Medallion flexibility amid market fluctuations. The capital injection is poised to underpin the critical development phase of the Ravensthorpe mine, enhancing the project's financial foundation and operational readiness.
Offtake Agreements and Market Exposure
Alongside financing, the offtake agreements with Trafigura secure a minimum delivery of 105,000 dry metric tonnes of copper and precious metals concentrate over seven years, with provisions to adjust quantities based on the facility drawdown. The gold dore offtake is linked to the facility drawdown, aligning production sales with funding utilization. This dual exposure to gold and copper strengthens the project's economic profile, tapping into robust demand for copper concentrate and precious metals.
Next Steps and Due Diligence
Medallion is progressing with technical, financial, and legal due diligence in parallel with the completion of its feasibility study, expected in November 2025. The definitive documentation for both the financing and offtake agreements will follow, contingent on satisfactory due diligence outcomes and approvals. Managing Director Paul Bennett highlighted the competitive nature of the tender process and the strategic value of partnering with a globally recognised commodity trader.
Balancing Opportunity and Caution
While the agreements mark a pivotal milestone, Medallion cautions that the terms remain indicative and non-binding until formal documentation is executed. The company continues to navigate customary risks and conditions precedent inherent in project financing and development. Nonetheless, this partnership with Trafigura positions Medallion to advance its sulphide development strategy with enhanced financial certainty and market access.
Bottom Line?
Medallion’s deal with Trafigura sets a strong foundation, but the path to production hinges on due diligence and final approvals.
Questions in the middle?
- Will the final feasibility study confirm the project’s economic viability to satisfy Trafigura’s due diligence?
- How will Medallion manage commodity price volatility without hedging requirements in the facility?
- What are the implications if the facility drawdown is less than the full US$50 million?
