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Selected Tendencies in
Mining Finance
3rd International Conference on Mineral Resources in the
Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Local Regulatory Framework
▬

Law on Mining and Geological
Explorations
—

▬

Law on PPP and Concessions
—

2

Novelties announced

Investor/financier friendly solutions

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Relevant
loan
collaterals

BANKABILITY
OF THE
PROJECT

The
position of
the
Lenders
3

Reputational
issues, other
projects

Anticipated
cash flow
margin

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

PROJECT
FINANCE

4

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Project Finance & PPP
▬

▬

Questionable relations between the SPV, partners
and the lenders?

▬

Securing the loan in PPP transactions

▬

5

Possibilities under the Law on PPP and Concessions

Limitations
3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Direct Agreements & PPP
▬

▬

Law on PPP and Direct Agreements

▬

Prior approval of the authority

▬

6

Concept of Direct Agreements

Local practice

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Comparison of Available Security
▬

▬

Direct Agreements favored by financiers

▬

7

Traditional collaterals vs. Direct Agreements

Pledge over concession rights?

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Other Finance Models
▬

▬

Private Equity

▬

Mezzanine Finance

▬

8

IFI Equity

Commodity Streaming

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

The
concept of
MF

MEZZANINE
FINANCE

Hybrid
nature
Higher
rate of
return

9

Local
possibiliti
es/issues

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

The
concept
of stream
financing

Features of
commodity
streaming

COMMODITY
STREAMING

Global
experiences
+
Commodity
Forwards

10

Local
possibilities

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Contact

Miloš Vučković
SENIOR PARTNER
milos.vuckovic@karanovicnikolic.com
Resavska 23
11000 Belgrade
Serbia
T + 381 11 3094 200
F + 381 11 3094 223

11

3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013
karanovic/nikolic

Thank you

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Tendencies in Mining Finance