RTG Mining secures $47m financing from Glencore for Mabilo copper-gold project

RTG Mining (ASX: RTG), through Philippines-based associate company Mt. Labo, has entered into a strategic partnership with global mining giant Glencore International for offtake and Stage 1 development financing of the Mabilo copper-gold project.

The secured financing facility provides for a total of up to approximately $47 million in three tranches.

This icludes an initial amount of approximately $5.5m to complete Stage 1 project land acquisition.

Philippines pro-mining

The move comes at a time when the Philippines has turned from being an anti-mining location to one that is very supportive of the resources sector.

“This is a very important and exciting step in the start-up of the high-grade Mabilo copper-gold project and signals the transition of RTG from explorer/developer to producer,” chief executive officer Justine Magee said.

“We are delighted to be partnering with Glencore to advance Mabilo and the favourable finance and offtake terms also come with a strong counterparty and group that have been both active and successful themselves in the Philippines via the PASAR refinery.”

Low-cost opportunity

A feasibility study has identified that Mabilo provides a low-capital, low-operating cost opportunity with rapid payback and strong overall economics.

RTG has also identified excellent exploration upside with strong copper porphyry potential.

“Stage 1 of the project is low-risk with only nominal upfront capital but generates very strong cash flow quite quickly, as there is no processing required—you simply mine the products, crush and then ship.”

“With a reserve grade of 21% copper, demand for the product is strong and should allow us to internally fund our equity contribution for Stage 2, which produces a high-grade copper-gold concentrate,” Ms Magee said.

Land acquisition

The initial focus for Glencore and Mt. Labo will be to finalise the land acquisition and then secure any necessary tree-cutting permits, after which Mt. Labo will be in a position to commit to the development schedule and start-up of the project.

“RTG remains very well positioned to capitalise on consensus views of strong and improving forecasts for copper and gold prices,” Ms Magee added.

“We believe this is a key milestone that will clearly demonstrate the value of the Mabilo project and we are excited to be moving the project through to operations.”

Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities.