ABSTRACT
This chapter discusses the special characteristics of mine development projects, with the aim of helping lenders and investors to understand how these projects differ from other industrial projects and how mines produce the cash flow needed to repay the financing. Financiers considering lending to mining projects need to understand how these mines generate cash flow, even more so when the lending is on a non-recourse basis, secured with project assets and cash flow. The chapter focuses on base metals, but same or similar general principles apply across the industry. The mining industry is divided vertically between exploration and mining, and mining is often integrated with the downstream activities of smelting, refining and metals trading. The London Metal Exchange (LME) quotes non-ferrous metals such as aluminium, copper, nickel, tin, zinc, lead, molybdenum and cobalt. The Chicago Mercantile Exchange quotes precious metals gold, silver, platinum, palladium and also copper.
