karanovic/nikolic

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

2 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

▬ Law on Mining and Geological

Explorations

— Novelties announced

▬ Law on PPP and Concessions

— Investor/financier friendly solutions

karanovic/nikolic

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

Relevant

loan

collaterals

Reputational

issues, other

projects

Anticipated

cash flow

margin The

position of

the

Lenders

BANKABILITY

OF THE

PROJECT

karanovic/nikolic

4 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

PROJECT

FINANCE

karanovic/nikolic

Project Finance & PPP

5 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

▬ Possibilities under the Law on PPP and Concessions

▬ Questionable relations between the SPV, partners

and the lenders?

▬ Securing the loan in PPP transactions

▬ Limitations

karanovic/nikolic

Direct Agreements & PPP

6 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

▬ Concept of Direct Agreements

▬ Law on PPP and Direct Agreements

▬ Prior approval of the authority

▬ Local practice

karanovic/nikolic

Comparison of Available Security

7 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

▬ Traditional collaterals vs. Direct Agreements

▬ Direct Agreements favored by financiers

▬ Pledge over concession rights?

karanovic/nikolic

Other Finance Models

8 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

▬ IFI Equity

▬ Private Equity

▬ Mezzanine Finance

▬ Commodity Streaming

karanovic/nikolic

9 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

The

concept of

MF

Hybrid

nature

Higher

rate of

return

Local

possibiliti

es/issues

MEZZANINE

FINANCE

karanovic/nikolic

10 3rd International Conference on Mineral Resources in the Republic of Serbia - Belgrade, 1 November 2013

The

concept

of stream

financing Features of

commodity

streaming

Global

experiences

Local

possibilities

COMMODITY

STREAMING

+

Commodity

Forwards

karanovic/nikolic

Contact

11

Miloš Vučković SENIOR PARTNER

milos.vuckovic@karanovic-

nikolic.com

Resavska 23

11000 Belgrade

Serbia

T + 381 11 3094 200

F + 381 11 3094 223

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

karanovic/nikolic

Thank you