Trafigura backs Euro Sun’s Rovina Valley with $200M financing deal

[Redator]

Euro Sun Mining (TSXV: ESM) has lined up a $200 million loan package, with backing from global commodities trader Trafigura, to help finance its Rovina Valley gold-copper project in Romania. The funding represents a major step toward developing Europe’s second-largest copper-gold deposit.

The financing, arranged with a syndicate of international banks and supported by Trafigura, will provide capital for feasibility work, permitting and pre-development work at the project. Euro Sun expects to complete final loan agreements in the third quarter, with initial funds available before the end of the year. The project may cost $448 million to build, according to a 2022 feasibility study. 

The deal, which includes a binding offtake agreement for up to all of commercial production over a seven- to nine-year period, comes as Europe seeks to bolster domestic supplies of copper and other critical minerals amid growing concerns over global supply chain security. The project, which is contentious for environmentalists, is on the EU’s list of 47 strategic ventures announced this year.

“Together with our strategic status granted and our financial position closer to being secured, we are on the cusp of being fully equipped to deliver this project for the people of Romania and Europe’s benefit,” Euro Sun CEO Grant Sboros said in a release. “The company is advancing with its environmental impact assessment submission and that will be followed with close engagement with Romanian officials.”

Two stages

Euro Sun said the loan will be provided in two stages. The first $50 million is expected once final loan documents are signed. The remaining $150 million would follow the completion of a definitive feasibility study and satisfaction of other conditions. The seven-year loan will carry interest tied to benchmark lending rates plus about 7% to 9%.

The Rovina Valley project, located in west-central Romania’s Hunedoara County roughly 300 km northwest of Bucharest, the country’s capital, hosts three porphyry-style deposits — Colnic, Rovina and Ciresata. The proposed mine is expected to operate for 27 years, with average annual production during the first decade of 116,000 oz. of gold and 49 million lb. of copper.

It has a measured and indicated resource of 406 million tonnes grading 0.54 gram gold per tonne and 0.16% copper, for 7 million oz. of contained gold and 1.4 billion lb. of contained copper. The 2021 feasibility study outlined a conventional open-pit operation at Colnic and Rovina, with on-site crushing, grinding and flotation circuits to produce a copper-gold concentrate for export.

Mining licence

Euro Sun acquired the project in 2016 and became the first company to secure a mining licence for a non-state-owned mineral deposit in Romania in 2018. Since then, it has advanced technical studies and permitting, although progress has been slowed by environmental approvals and community consultations. There’s been long-standing opposition to the project from some groups.

Shares in Euro Sun have tripled this year to C$0.12 apiece in Toronto for a market capitalization of about C$50 million ($36 million).

Trafigura’s support highlights the trader’s strategy of securing upstream sources of critical minerals. The Singapore-based company, among the world’s largest commodity traders, has previously helped finance and secure supply from copper, cobalt and nickel projects worldwide to meet rising demand for metals vital to the energy transition.

“We are pleased to support Euro Sun in advancing the Rovina Valley project,” Ross Ridgway, head of copper at Trafigura said in the same release. “As global demand for copper continues to grow — driven by electrification and industrialisation — the need for secure, sustainable new sources of supply has rarely been more important.”