NEW YORK A consortium of
South Korean investors has committed to provide full
second-phase funding for Baja Mining Corp.s
minority-owned copper-cobalt-manganese-zinc mining subsidiary
Minera y Metalúrgica del Boleo (MMB), allowing the Boleo
Mine project to continue, Vancouver, British Columbia-based
Baja said Feb. 12.
According to the agreement, MMB
will receive the total second-phase funding requirement of
$443.4 million$259 million, or 58.4 percent, of which has
already been paid.
The group of investors, led by
Korea Resources Corp. (Kores), has now acquired a further
22.8-percent in MMB, reducing Bajas stake in the
subsidiary from 49 percent to 26.2 percent. Once Baja has
received all second-phase financing contributions, its stake in
the flagship Boleo project will be reduced to 10 percent, Baja
said, down from 70 percent a year ago.
"The company is hopeful that the
fact of the phase-two funding commitment having been made will
assist MMB" in achieving financial stability, Baja said in a
News of the funding commitment
follows a number of challenges for the cash-strapped miner,
which said in 2012 it was facing overrun costs of around $440
amm.com, Oct. 25). The cost overruns have been
attributed to underestimated construction costs during
planning, contractor inefficiencies, increased labor costs and
reappraised plans for a marine terminal, a source familiar with
the company said.
The company has been
coordinating funding for mounting project costs for months,
reducing its equity interest in MMB with each financial
"The choice on the other side of
it is to go bankrupt, so obviously were very pleased to
see that were going ahead," Tom Ogryzlo, Bajas
interim chief executive officer, told AMM.