Centenario Copper Completes Partial Copper Hedge Monetization for USD $26 Million of Net Proceeds

Centenario Copper Completes Partial Copper Hedge Monetization for USD $26 Million of Net Proceeds

On November 13, 2008 Centenario Copper Corporation reported that it had received the consent of the lenders under the Franke Credit Facility, to repurchase a portion of the 2010 copper hedge book to yield $26 million in net proceeds. On November 19, 2008, all relevant documentation was completed, and the Company repurchased 30.2 million pounds of outstanding copper hedge contracts, dated from May 2010 through December 2010, at an average price of $1.79/lb, for net proceeds to the Company of $26 million.

After this transaction, the Company still has forward sales in place of 25.5 million pounds at an average price of $2.80/lb, for delivery between May and December, 2009 and 18.8 million pounds at an average price of $2.73/lb for delivery between January and May 2010, for a total of 44.3 million pounds of copper at an average price of $2.77/lb.

The proceeds from the Copper Hedge Repurchase (the “Hedge Proceeds”) will be placed into an escrow account. The release of the Hedge Proceeds to the Company will be subject to the completion, to the satisfaction of the Lenders, of due diligence activities underway by the Lenders’ Technical Agent in relation to an updated Franke Development Plan. This updated plan is based on a revised mine plan, which incorporates a China starter pit of oxide material into the previously standalone Franke mine plan, and a revised capital cost and development schedule. The revised mine plan is progressing, and it will be incorporated into a NI 43-101 compliant Technical Report currently underway. The release of the Hedge Proceeds and drawing of the remaining $5 million available under the Franke Credit Facility will also be subject to the Company’s ability to continue to meet the terms of the existing Franke Credit Facility, or such amendments as the Lenders shall require, which may include, but may not be limited to, revised pricing, covenant terms and loan amortization schedule and additional copper hedging.

The Company currently anticipates that the Lenders’ Technical Agent will complete its due diligence review in the next several weeks and that it will be able to finalize a satisfactory agreement with the Lenders shortly thereafter in relation to any modifications that may be required to the Franke Credit Agreement in order to satisfy the conditions of release of the Hedge Proceeds to the Company. However, there can be no assurance that the Company will be able to reach definitive agreements with the Lenders, or will be able to meet the Lenders’ conditions for the release of the Hedge Proceeds to the Company.

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