Globe Metals & Mining

 - 45 Ventnor Avenue, West Perth, WA 6005
PO Box 1811, West Perth, WA 6872
T: +61 8 6118 7240
F: +61 8 6323 0418

Malawi - 

 Lot 47/04/554, Chia Street, Area 47, Lilongwe, Malawi
Private Bag A201, Lilongwe, Malawi
T: +265 1 794 070
F: +265 1 794 629

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Funnel Sans

⛏ Junior mining companies with limited market capitalization often face skepticism regarding their ability to secure funding for development without significantly diluting existing shareholders. One effective strategy to avoid dilution is by utilizing an Export Credit Agency (ECA), which serves as a non-dilutionary mechanism.

A government agency provides a guarantee for a loan with a domestic bank. This loan is typically secured by an offtake agreement, where an overseas mining company commits to supplying critical minerals to a local organization in the agency's country. The mining company receives payment for the critical minerals and repays the loan, including interest, to the domestic bank.

This approach benefits all parties involved:

✔ The government ensures a secure supply of critical minerals within its borders.

✔ Off takers can bolster local employment by utilizing the steady supply of critical minerals in their production processes.

✔ The bank earns interest on a low-risk, guaranteed loan.

✔ The mining company secures funding without dilution, allowing for project advancement while establishing offtake agreements and a reliable revenue stream.

How does an Export Credit Agency (ECA) work