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European Goldfields: Qatar Holdings Deal Cheaper Than Bank Loan

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"As a former banker, I strongly believe that the best agreements with banks are reached when there is no need for them", said vice-president and financial director of European Goldfields, and former HSBC executive Tim Morgan-Wynne, at a conference call with analysts on Monday. 

Commenting on the agreement with Qatar Holdings, he said that options of financing the project of Kassandra mines were running out, amid global and Greek slippage.

Seeking funding for the 30-year investment with total cost of €1 billion, the Canadian investors began negotiations with Qatar Holdings. 

"The agreement with Qatar is cheaper than bank borrowing. It allows us to save commission costs without resorting to equity or capital markets. We save almost €200 million in interest” said Wynne. 

Canadian investors also indicated that negotiations with Qatar Holdings took long and intensified during the last three to four weeks. They stressed that the agreement meets the needs for funding of Euro Goldfields and strengthens Ellaktor’s liquidity. 

The project will be financed by Qatar Holdings with CA$ 750 million, while additional funds of CA$ 450 million would be raised through issuing of warrants. 

Approximately 23.8 million ounces of gold have been detected in the area.
 
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