Cupric Canyon Capital, a private equity firm backed by the former Natural Resource Investments unit of Barclays, said it would approach the market to raise up to $350 million, in order to bring its Khoemacau copper and silver mine in northwest Botswana into production.
The construction of the mine in the Kalahari Copper Belt is set to start in late 2016 with the first copper shipment to markets expected in 2018.
Cupric Canyon Africa Chief Executive Officer Sam Rasmussen said the mine will produce 50,000 tonnes of copper and 1.5 million ounces of silver a year. Cupric Canyon Africa is the parent company to Khoemacau.
"We are looking at about $350 million to get started. We will approach the markets before the end of the year to seek the start-up capital for the development of the mine," Rasmussen told Reuters.
"It can be investment through equity or otherwise. We do not have a preferred financing option yet, it will all depend on the response from the market," he said.
Cupric has appointed Citi to work on the financing. A deal could take the form of a joint venture or even an outright sale, banking and industry sources said.
Initially expected to cost about $200 million, the development of the new mine will be based on a revised feasibility study which has proved a larger copper and silver resource at the mine.
The mine is projected to have a productive life of at least 25 years and Cupric has already invested over $250 million, one source close to the company said.
Khoemacau is expected to utilise the processing plant at the nearby Boseto Mine, which it acquired after the liquidation of Discovery Metals.
In May Khoemacau concluded a $35 million deal to buy the mothballed Boseto copper mine situated 30 kilometres away from the Somelo site.
Founded in 2010, U.S.-based Cupric is owned by its management, which includes former Freeport-McMoRan President Timothy Snider, and Global Natural Resource Investments (GNRI), formerly a unit of Barclays until a management buyout last month.
Barclays had put the asset on a list of businesses that it intended to sell or run down, saying it was not strategically important for the bank.