From Jim:
The additional drilling to convert a portion of our Probable Reserves to Proven Reserves is being requested by EXIM. Often, commercial banks will not require this, as Proven and Probable reserves are considered reserves against which debt financing can be done. EXIM is leaning to the conservative side here, but that is understandable given their limited history in financing large-scale mining projects and given that our Project is one of, if not the largest single prospective loan currently in EXIM’s new Make More in America initiative.
The additional drilling would probably take 12 weeks in the field, with the follow-on resource and reserve update analysis to be completed by independent consultants. Other elements of the FS update, such as updated engineering for our improved process flow sheet and the railveyor/electrified approach to the mine, can continue on a corollary path. And, EXIM loan due diligence processes will continue to advance during the pendency of this work.
Everything required for an updated FS should take about 9 months total to complete although, as Scott mentioned, there will be a large effort to accelerate that timeline as much as possible.
EXIM’s additional requirement on drilling was made in the spirit of putting them more solidly in the position of providing us with debt financing. We welcome that. We are working closely with EXIM staff and leadership, and with the excellent JPMorgan team, and the effort continues to move in the right direction.
There is also very strong and bipartisan political support for the Project in Congress and across the Executive Branch. While EXIM will craft a financing package based on the merits, economics, and determination of the Project's ability to repay the debt, this political support helps a great deal. Without it, projects such as this do not tend to be seriously considered for such large amounts of government support.
Jim Sims
