Tartana Minerals Secures $5M Non-Dilutive Financing Linked to Copper Revenue
Tartana Minerals has inked a non-binding Letter of Intent with Alt Resources for up to $5 million in non-dilutive financing, structured to align repayments with copper production and prices. This deal aims to optimize existing operations and fund expansion through the Mungana processing plant.
- Non-binding LOI signed with Alt Resources for $5 million financing in two tranches
- Tranche 1 ($1.1M) to optimize copper sulphate production and conduct drilling
- Tranche 2 ($3.9M) contingent on access to Mungana processing plant for refurbishment
- Repayments and interest linked to copper sulphate and concentrate revenue streams
- Early buyout options with repayment terms aligned to Tartana’s production and commodity prices
Strategic Financing to Boost Copper Production
Tartana Minerals Limited (ASX, TAT) has taken a significant step towards expanding and optimizing its copper operations by signing a non-binding Letter of Intent with UK-based Alt Resources plc. The agreement outlines a potential $5 million non-dilutive financing package, structured in two tranches, designed to support Tartana’s production growth while aligning repayment obligations with actual revenue performance.
The first tranche, valued at up to $1.1 million, is earmarked for immediate operational improvements. This includes optimizing the copper sulphate pentahydrate production process at Tartana’s Heap Leach and Solvent Extraction plant, aiming for sustainable output and better utilization of the plant’s capacity. Additionally, funds will support drilling and metallurgical test work at the Tartana Open Pit mine to potentially increase resource estimates.
Conditional Expansion via Mungana Processing Plant
The second tranche, up to $3.9 million, is contingent on Tartana securing access to the Mungana processing plant. This capital will finance refurbishment efforts, associated capital expenditures, and working capital to process copper sulphide ore from the Tartana Open Pit mines. The phased drawdown reflects a cautious but growth-oriented approach, ensuring that financing aligns with operational milestones.
Crucially, both tranches feature repayment and interest terms linked directly to copper revenue streams; copper sulphate pentahydrate for tranche one and copper concentrate for tranche two. This revenue streaming model means Alt Resources’ returns will fluctuate in tandem with Tartana’s production levels and prevailing commodity prices, sharing both upside potential and downside risk. The fixed interest rate is approximately 11% per annum, with early repayment options available within three years of drawdown.
Aligning Interests for Sustainable Growth
Managing Director Dr Stephen Bartrop highlighted the strategic nature of this financing structure, emphasizing its non-dilutive character and alignment with Tartana’s revenue. By linking repayments to actual production and market conditions, Tartana mitigates financial risk while preserving shareholder value. Alt Resources, known for partnering with mid-tier miners through tailored financing solutions, brings operational support and a long-term partnership approach, which could prove valuable as Tartana advances its copper projects in North Queensland.
This financing package not only provides immediate capital for operational enhancements but also positions Tartana to leverage its assets more effectively, potentially accelerating production growth and resource development. The deal underscores the growing trend of revenue-linked financing in the mining sector, offering a flexible alternative to traditional debt or equity raises.
Bottom Line?
Tartana’s revenue-linked financing deal with Alt Resources sets the stage for growth while sharing market risks, a model to watch closely.
Questions in the middle?
- Will Tartana secure access to the Mungana processing plant to unlock the second tranche?
- How will fluctuating copper prices impact repayment schedules and Tartana’s cash flow?
- What are the detailed final terms of interest and repayment once the definitive agreements are signed?
