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EBRD makes loan to gold mining project in Uzbekistan
A loan signed today by the European Bank for Reconstruction and Development and the Zarafshan-Newmont Joint Venture will finance the construction of a project in Uzbekistan for the recovery of gold from low grade ores.
The Zarafshan-Newmont Joint Venture is 50 per cent owned by Newmont Mining Company, a US-based gold company, and 50 per cent owned by Uzbek interests. EBRD commenced work with Newmont in December 1992 and developed a financing structure for the project. In May 1993 the EBRD and Barclays Bank as joint arrangers launched the financing in the syndicated loan market.
The US$ 105 million loan to the Zarafshan-Newmont Joint Venture will finance the construction of a heap leaching facility near the Muruntau Mine, the largest open pit gold mine in the world, to reclaim gold from low grade ore using a chemical leaching process. Up to 5 million ounces of gold are expected to be extracted over 15 years.
The EBRD will be lender of record for the full amount of the loan, US$ 52.5 million of which will be participated to 13 commercial banks. Commercial banks participating in the financing in addition to Barclays Bank are: Bank Austria, Bayerische Vereinsbank, BHF-Bank, Chase Manhattan Bank, Chemical Bank, Credit Lyonnais, Credit Suisse, Dresdner Bank, Mase Westpac, Rothschild, Swiss Bank and UBS.
Jacques de Larosière, President of EBRD, said: "This transaction represents the first mining project finance for the Bank, the first syndicated financing for the former Soviet Union, and the first limited recourse private sector loan for Uzbekistan in any of the capital markets. It will generate much needed hard currency for Uzbekistan to underpin economic reforms in the country."
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