Roy Hill banker on board for Razorback financing as Magnetite Mines calls in the heavy hitters

Iron ore mine developer Magnetite Mines has called in the heavy hitters to assist its efforts to finance the Razorback magnetite iron ore project in South Australia.

Magnetite Mines (ASX:MGT) has brought Sam Chee on board as the company’s strategic advisor for project financing.

The investment banker has over 27 years of banking and finance experience across financial advisory, debt arrangements and structuring mandates in mining, energy and infrastructure.

But most notably he was a key figure in the US$7.2 billion funding package that bankrolled Gina Rinehart’s Roy Hill mine — the largest debt financing for any greenfields mining project in the world.

Now handsomely paid off through several years of strong profits driven by high iron ore prices, the complex Roy Hill deal included loans and guarantees from five export credit agencies and a consortium of 19 banks from Australia, Japan, Europe, China and Singapore.

In particular, all four of Australia’s major banks took part.

Chee’s acumen and networks were built through a range of roles including a recent stint as Sumitomo Mitsui Banking Corporation’s deputy general manager and head of mining and metals project finance.

His career stops also include ANZ, WestLB, NM Rothschild, NAB and PwC.

That experience will benefit Magnetite as it sources funding for Razorback, a South Australian mine which promises to be among the next generation of high grade projects required to fuel the steel industry’s shift to low emissions processing technology.

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Magnetite Mines placed a US$429-506m price tag on the development of Razorback in a July PFS, around a third of estimates completed by previous management several years ago.

A DFS is currently in the works and due out in 2022.

The mine would produce around 2.7Mt of 67.5% plus magnetite concentrate every year at relatively low emissions, utilising renewables-rich electricity from the main South Australian grid.

This is important, because high grade iron ores like Razorback’s are not common, and low emissions steelmaking technologies will need large supplies of product like MGT’s to displace coal-burning blast furnaces over the long term.

Chee identified Razorback’s contribution to that transition as a major reason for taking on the role.

“I’m excited about Razorback’s potential contribution towards low-emissions steelmaking and delighted for the opportunity to assist with progressing successful project financing,” he said.

MGT executive chairman and CEO Peter Schubert said Chee’s skills would be invaluable in the financing process.

“We are delighted to welcome Sam to the Magnetite team to augment our strategy to secure project finance for the Razorback High Grade Iron Ore Project,” he said.

“Sam has an outstanding track record of success delivering on strategy, execution, and implementation of funding solutions, particularly for resource-based projects, and will further assist the Company in advancing funding discussions with partners and financiers.

“His unique blend of corporate and technical skills will be invaluable to the board at this stage in the Razorback journey and we look forward to working more closely with him.”

This article was developed in collaboration with Magentite Mines, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.