NEW YORK Baja Mining Corp. has secured a further extension of a standstill agreement from lenders, as well as $84 million from a South Korean consortium of shareholders, enabling it to continue construction on its flagship Boleo Mine in Baja California Sur, Mexico.
The Vancouver, British Columbia-based company has faced a financial crisis in recent months. Since June, lenders have frozen funds to its 49-percent-owned Minera y Metalurgica del Boleo SA de CV (MMB) subsidiary, which faces $440 million in overrun costs (amm.com, July 27).
Baja has relied on the consortium to keep the project going. The most recent $84-million bailout is in addition to $120 million in prior funding from the consortium, which includes Korea Resources Corp., LS-Nikko Copper Inc. and Hyundai Hysco Ltd., among others.
The lending extension from the banks, which was contingent on the bailout, allows for construction of the Boleo copper-cobalt-zinc-manganese mine to continue until Nov. 20.
The South Korean consortium is now talking with the lenders to renegotiate the projects original financing agreement in an effort to partially reactivate the loan facilities by Nov. 20, according to Baja.