Shadow banking to dominate in Latam projects

Author: Michael Washburn | Published: 12 Sep 2012

Toronto-based HudBay Minerals’ $1.5 billion Peruvian copper mine investment signals a major shift in global project finance. Here’s why. The Constancia mine funding involved a $750 million precious metals stream transaction in which the silver mining group, Silver Wheaton Corporation, receives 100% of payable gold and silver from HudBay's 777 mine until 2016 and 100% of payable silver from the Constancia site. A $600 million credit facility with a syndicate of Canadian and international banks has also been used to fund Constancia as well as HudBay’s Lalor and Reed mining projects. Market participants predict the transaction may prompt more involvement from mid-tier firms and hedge funds in conceiving, setting...