Despite global economic woes and tightening or freezing of most private equity capital markets, financing for in-ground collateralized assets remains viable. The demand for oil, gas, coal, gold, silver, and other precious metals has remained strong throughout time. Economic uncertainty is dramatically increasing the demand for gold around the globe. With the relatively low loan amounts in relation to the proven value of the asset, major investment banks view in-ground collateralized assets as a safe investment.
Monetization of In-Ground Assets is a complex financial structure that requires considerable time and effort, assessment of and mitigation of risk, cross syndication efforts, and many other components that are required to ensure the success of the investment banks. “The entire process is more of an art than a science” states Jeff Hampton of www.minerals-
Typically, many different types of assets are syndicated together and funded at the same time in a single funding tranche. “We will fund 15-25 deals for approximately $7-$10 billion per funding tranche” says Jeff Hampton of www.minerals-
There are different loan to asset value guidelines for an Operating Field or Mine versus a Non-Operating Field or Mine. “Depending on the project and production levels, we’ll consider up to 25% loan to asset value for an operating field or mine” says Jeff Hampton. “Most non-operating fields or mines are limited to 5%, possible more depending on the project. Our minimum loan amount is typically $30,000,000 with no maximum and the asset must be on U.S. soil.”
For more information, please contact:
Jeff Hampton
Managing Director
Minerals & Energy Consultants
Off: 800.979.4550
Fax: 925.406.0990
jhampton@minerals-
www.minerals-
