Industries
Mining and natural resources
Resource funding is available for producing and near-production assets where reserves are independently verified and offtake is contracted. Structures include project debt, streaming and prepayment arrangements.
Mining and natural resources
- Project debt for near-production assets
- Offtake and prepayment structures
- Equipment finance for mine fleets
- Common structures
- Project debt, offtake/prepayment finance, streaming, equipment finance
- Typical facility size
- €5 million – €150 million
- Indicative pricing
- Base rate plus 4–9 per cent, or streaming discount to spot price
- Security
- Project assets, reserves-backed security, offtake assignment
- Time to funding
- 3–9 months from bankable feasibility study
Long lead times and reserve-driven value
Mining and natural resources projects move through distinct stages — exploration, feasibility, development and production — each with a different risk profile and a different pool of capital willing to fund it. Value is anchored to independently verified reserves and, once production begins, to contracted offtake for the commodity produced.
The capital intensity of development, combined with exposure to commodity price cycles, means funding structures are built to isolate lenders from exploration risk while giving sponsors access to capital as the project de-risks through each stage.
Structures suited to the production lifecycle
Project debt for near-production assets is sized against independently verified reserves and contracted offtake, typically structured on a limited-recourse basis once a bankable feasibility study is complete. Offtake and prepayment structures — where a buyer advances funds against future delivery of the commodity — provide capital ahead of production without conventional lender security.
Streaming arrangements, where an investor funds development in exchange for a share of future production at a fixed price, suit assets with strong reserves but limited debt capacity. Equipment finance for mine fleets — haul trucks, excavation and processing equipment — follows a conventional asset-backed structure once the underlying project has secured its development capital.
What lenders scrutinise
Independent verification of reserves — through a recognised competent person's report or equivalent — is a threshold requirement before most debt providers will engage, alongside the assumptions underlying the reserve estimate. Offtake counterparty credit quality and the terms of any offtake agreement are assessed as closely as the asset itself, since repayment often depends on that counterparty performing.
Jurisdictional risk — permitting regime, mining law stability and repatriation of proceeds — is a significant factor in pricing and structure, alongside the technical and operational track record of the management team.
Where applications typically fail
The most frequent misstep is approaching debt providers at the exploration stage, before reserves are proven or a feasibility study completed; exploration is overwhelmingly equity-funded and debt providers will decline outright. Overly optimistic commodity price assumptions in feasibility economics are a second common issue, undermining lender confidence once independently stress-tested.
Sponsors also frequently underestimate the time required for offtake negotiation and reserve certification, both of which are prerequisites for debt financing and cannot be compressed to match a sponsor's preferred timetable.
How GFG runs the process
GFG assesses project stage, reserve status and offtake position at the outset, directing exploration-stage sponsors towards appropriate equity or grant capital rather than debt providers who will not engage. For near-production and producing assets, feasibility economics, reserve reports and offtake terms are reviewed before approach to ensure the project is presented to providers with a genuine mandate for that stage and commodity.
Is exploration funded?
Rarely by debt. Exploration is typically equity funded; debt enters once reserves and economics are proven.
Can exploration-stage mining projects access debt funding?
Rarely. Debt providers generally require independently verified reserves and, in most cases, a completed feasibility study before engaging, since exploration carries risks that debt structures are not designed to price. Exploration is overwhelmingly funded through equity, strategic partners or grant capital.
What is a streaming arrangement and when does it suit a project?
Streaming provides upfront capital in exchange for the right to purchase a share of future production at a pre-agreed, typically discounted price. It suits projects with strong verified reserves but limited capacity for conventional debt, and does not carry the fixed repayment obligations of a loan.
How important is offtake in securing project debt?
Very. Contracted offtake with a creditworthy buyer is typically a precondition for project debt on near-production and producing assets, as it provides the revenue certainty lenders rely on for repayment. Uncontracted or spot-market sales significantly reduce available leverage.
Does jurisdiction affect the availability of financing?
Yes, materially. Jurisdictions with stable mining law, established permitting regimes and reliable repatriation of proceeds attract a wider pool of lenders and better pricing than jurisdictions with elevated political or regulatory risk, which may require political risk insurance or multilateral participation.
Can existing mine equipment be refinanced to release capital?
Yes, mine fleet and processing equipment already owned outright can generally be refinanced through asset-backed structures, provided the underlying project has an established production and cash-flow record.