Caravel Minerals Ltd (ASX: CVV) has had good news regarding funding for its Western Australian copper project in recent days, which has piqued the interest of the team at Canaccord Genuity, which has boosted the company's price target in a recent report.
Caravel claims that its Caravel Copper Project is the largest undeveloped copper project in Australia, with mine studies projecting a 25-year mine life, processing 30 million tonnes of ore per year for 65,000 tonnes of copper.
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Funding progressing
The company is currently working on a definitive feasibility study for the project and announced last week that two European bodies had signed non-binding letters of interest to fund it.
Finnvera plc, Finland's official Export Credit Agency, supplied the company with a non-binding letter of interest, as did KfW IPEX, "a specialist provider of international project and export finance within the KfW Group in Germany''.
Caravel explained further:
The KfW IPEX letter of interest confirms interest in providing up to US$220 million in tied Finnvera backed senior debt as Senior Lender for the Caravel Copper Project, subject to satisfactory due diligence (including environmental and social), all approvals, execution of finance documentation satisfactory to KfW IPEX, and fulfilment of applicable conditions precedent. Export Credit Agency funding is expected to form a key component of Caravel's diversified funding stack, alongside project offtake partner equity, precious metal streaming, mining fleet finance, and traditional project debt. The company continues to advance discussions with multiple parties to secure a comprehensive financing package for Project development.
Caravel Managing Director Don Hyma said the letters of interest marked significant progress for the company's financing plans for the mine.
Mr Hyma added:
We are following a structured process to deliver a timely finance solution for the project and our shareholders. These letters of interest underscore strong international supply chain interest in our strategically significant copper and molybdenum product streams – recognised as critical minerals in multiple global jurisdictions – and strengthen our pathway to a multi-source funding package as we advance towards a final investment decision.
The funding announcement followed another significant milestone in November, when Caravel signed a non-binding memorandum of understanding with a subsidiary of Adani Enterprises, Kutch Copper, which could lead to either direct funding from Kutch or potentially an offtake agreement covering all of the mine's output.
Shares looking cheap
The analysts at Canaccord Genuity have assessed the latest announcement and upgraded their price target for Caravel shares from 60 cents to 80 cents.
They note that the process plant design for the mine is about 90% complete, and progress has been made on several fronts to feed into the definitive feasibility study.
Caravel shares are currently changing hands for 40 cents. The company was valued at $223.5 million at the close of trade on Friday.
