By Matt Davis | February 24, 2026
Webinar
In this webinar, Pivotal180 and co-hosts Citi and HSF Kramer discuss the nature, risks and drivers of debt sizing for energy and resources deals, with a focus on how the unique risks inherent in mining projects require additional nuance and complexity when compared with other infrastructure project finance. We then examine how mining project contracts are reflected in project financial models — and vice versa — and identify must-have items to include in a best practice financial model that can enable a successful debt capital raise. Combining Pivotal180’s world-class project finance modelling training, Citi’s leading energy resources financing practice, and HSF Kramer’s experience advising both lenders and borrowers, the webinar explores practical considerations for mining projects and companies looking to raise debt and the various structures available to them depending on their needs, with examples and tips from experts with real transaction experience.
Webinar speakers are: Matt Davis, Managing Director at Pivotal180 Rod Hill, Managing Director and Head of APAC Metals & Mining Corporate Banking at Citi Andrew McLean, Partner at Herbert Smith Freehills Kramer
Video
Video Transcript
All right. I’m sure we’ll have, have some more coming in. But, we’ve got a lot of material to get through today, and we want to make sure we have enough time to do so. So why don’t we go ahead and kick this off for those who, aren’t able to attend today, we are recording this webinar and this will be available on our on Pivotal180’s website, and on YouTube within a few days.
So don’t worry if you miss any of this or any of your colleagues would like to join, we will have that available to them shortly. But with that, just want to welcome everybody to today’s webinar on Project finance modeling for Mining and Natural Resources. My name is Matt Davis. I’m a managing director for a Pivotal180 180 here in Australia.
I’d like to begin by acknowledging the traditional owners of the land on which I and all of you are meeting today, wherever you may be, and pay my respects to our elders, past and present. I’m very fortunate to be joined today by two outstanding co-hosts, Rod Hill from city and Andrew McLain from Herbert Smith Freehills. Grammar, Rod and Andrew are two of the most experienced and knowledgeable professionals in the mining finance sector.
They’ve been really invaluable in helping put together this event today and I’m very, very fortunate to have them here with me. We’ll get into our agenda in just a moment, but first wanted to give each of them an opportunity to introduce themselves. And we’ll start with rod. So go ahead rod, take it away. Thanks, Matt. Real pleasure to be here today and to speak with you all on this, great topic.
Unfortunately, that number of 35 years is actually accurate. I have been doing it that long. And I’ve had the pleasure of being involved in the mining sector across, pretty much all aspects from the debt side and commodities, aspect in particular, with a great deal of focus on project finance, raising money for junior mining companies, as well as covering the much larger entities and, where they’re typically finance in difficult different capital markets.
So, pleasure to be here today and to to talk about the subject. I’ll hand over to Andrew. Thanks, Robert. Yeah, it was a real pleasure to be here today, with you both and with everyone on the lawn. So, as Matt said, I’m a partner, Herbert Smith Freehills. Kramer. My career turns 21 this year, so I’m thinking about a party, but, it feels a bit more like Rod’s 35.
I’ve got a side that, I’ve spent most of those 21 years, based in Perth, and, as a result of sort of been then reared on on mining project finance has a lot of, people in Perth, tend to be connected to, to the mining sector. So I spend some time, overseas and interstate, but, but, most of my career in Perth into a mining finance and that, that is predominantly, project finance for, for commodity projects, for the precious metals, those metals, increasingly in the critical minerals space, we have we act for lenders and borrowers, and enjoy that mix.
But also do a lot of sort of corporate and other financing in the, in the mining, other sectors. But that’s, that’s the key bit. So hand back to you, Matt. Thanks, Andrew. Thanks, rod. For myself, as I said, I’m managing director for Pivotal180 here in Australia. Spent the last 12 or so years in the project finance space across a number of different sectors renewables, infrastructure, and now mining, Pivotal180 is a global financial modeling, training and advisory business.
We run training, provide training and mentoring to lenders and investors around the world. And in project finance, modeling for energy, infrastructure, resources, mining and a number of other sectors. Hopefully, a lot of things to talk about today, but hopefully you’ll learn a bit from today’s session. And if you do and you enjoy this program, would love to hear from you about what you enjoyed, what else you’d like to learn, and if you’d be interested in learning more about financial modeling training programs for your organization, please reach out to
After the webinar. So a couple of things we’re going to talk about over the next 90 minutes together. We’re going to start by sort of talking about what what project finance is and what the nature of project finance is. And when we’re talking about raising capital, raising debt in particular for energy and natural resources deals, what that looks like.
And then myself and Rod and Andrew together, we’ll talk about some things that maybe are a little bit different when it comes to the mining sector because of the specific risks involved in mining that make it a little bit more challenging and less vanilla, say, than than many other industries to which this sort of structure is often applied.
We’ll talk about what lenders require in models and what they require in in contracts and in deals, and their expectations for what to see in a best practice financial model for executing a mining transaction. And then Andrew will be able to speak quite well to commercial and legal considerations that impact deal structuring. How do we tie the model to the contracts and the contracts of the model, and make sure those are aligned?
Because if your model doesn’t match your contracts well, it’s not worth very much that hopefully at the at the end, we should have a little bit of time for Q&A if you have any questions. As we’re going, there’s a couple different ways you can do that. There is a Q and A question and answer option. You can submit questions through that if they’re relevant.
As we’re going through my answer them as we go. Otherwise we’ll sort of come to them at the end if you’d prefer, you’re welcome to post your questions in the webinar chat as well. We’ll get to as many of those as we can towards the end. And if we do run out of time, please, do follow up via email and we are happy to to provide some more thoughts that way.
So with that, let’s start off with what project finance is in general before thinking about mining or or any other industry. What are we talking about? When I talk about project finance, when I talk about in particular a way that not all but a lot of projects are finance, which is with what we call non-recourse financing. And this is a way that I start a lot of our training courses at Pivotal180’s with the sort of question around how in the world could you ever convince a lender, a sophisticated financial institution, to lend millions, hundreds of millions, maybe even billions of dollars, depending on the size of the project, to a project company that is
set up to own a project, right? It doesn’t own anything else. It owns just the contracts of that project. It has no credit rating of its own. It maybe has no employees, it has no operating history. And really, critically, it’s making no guarantee to repay it. Hoping to raise that financing on the basis of I would call non-recourse financing.
Yes. Besides, not the slides, but the presentation will be available. Sorry. After the webinar, on the basis of simply the cash flows of the project, the only guarantee to repay will be if the project generates or the only way the loan will be repaid. Rather, it will be if the project company through the project generates enough cash flow to do so.
And that seems sort of like a crazy thing to do, right? To be lending that much money on a non-recourse, no guarantee to repay example we often give is that even if the equity owner of the project is Bill gates or the King of England, they still can’t say if the project doesn’t generate enough cash flow. Hey, Bill, you’ve got to pay me back.
Only the project company has liability to repay and because of this, places extra emphasis and extra importance on accurate and precise cash flow modeling, cash flow modeling, and flexible cash flow modeling as we’ll come to as well. And that means that we need a good financial model. We need a model that can take into account all of the different ways that the various parties involved in the deal, from the EPC contractor who builds it to the fuel supplier, whoever is operating the project, the off taker.
If we’re talking about an energy project, and we’ll talk about how that might be a little different from mining, how all of these parties interact with the deal and the financial impact of each of them. Now, a lot of different industries and types of infrastructure that are funded on this basis, like power plants, like toll roads, like hospitals, lots of different things are funded in this way.
They have in common that they often are fairly low risk. Right, that maybe they’re fairly low risk, in terms of the cost to build fixed cost, perhaps with penalties to the EPC if it’s not built on time, fixed price, that the operating costs are generally fairly well known with short term mid-term contracts at fixed prices and maybe some escalators, but but pretty well known and predictable that sales volumes like sales of energy or or number of cars going over a road might be predictable, and that if they’re not right, maybe instead revenue might be earned via fixed fixed rates, fixed project agreements that governments might provide, and that the price that’s going to be
received for what these projects are selling is predictable as well. Maybe a long term energy sales contract or again, one of those project agreements, simply an agreement with a government or government entity to provide a fixed amount of revenue just in exchange for operating the infrastructure. That’s great. Right? When when we’re lending just against cash flows, this is a great thing to have is predictability lenders and can rely on that predictability to know that, yes, things might vary a little bit from what the models will get to expects, but hopefully not too much.
Hopefully with that combination of things, they can look at a model and look at a forecast of of course, some upfront construction cost to build the project, but hopefully fairly steady revenues over time, hopefully fairly steady operating costs over time. Therefore hopefully fairly steady cash flows as we’ll come to in a minute. Lenders love to see this predictability and cash flows, predictability and revenues and costs make it fairly easy.
Or say a solar project or a toll road or a hospital, hopefully to be able to be financed on this basis. And certainly these things can get more complicated. But when we have predictable cash flows, we can size debt and structure debt fairly simply. When it comes to project finance. Now, that might not always be the case when it comes to mining, as we’ll get to in a minute.
But let’s start with that idea. If we have predictable forecast, highly forecast cash flows, then how would we would we size and structure debt for project finance? And then how might we tweak it when we come to something a little bit less predictable, like a mining project? Now to start with, for sizing debt or project finance. In this way, we really care about three things when it comes to sizing debt.
And in general, we want to raise as much debt as we can a lot of the time, because as many of you would know, why do we raise debt? We raised debt because with gearing or leverage or whatever term you want to give it, equity investors achieve better returns by raising debt, by having higher gearing, and in traditional project finance, and still in mining to an extent, how much gearing or how much debt a project can raise really depends on three things.
