EBRD mining finance in – Tumad case study

Turkish-Swedish Mining for Generations

18 February 2021 Content

1. EBRD at a glance 2. Natural Resources/Mining finance 3. Case Study – Tumad Gold, Turkey

2 EBRD Introduction An international financial institution supporting the development of sustainable well-functioning market economies

1991 Established 1992 Russia and 11 other members of Shareholding structure the former join UK 2007 The Czech Republic becomes the 8.6% first country to “graduate” from the Japan EBRD 8.6% 2012 Starts investing in Egypt, Jordan, Morocco and Tunisia 1 2016 25th anniversary; US… EU 27 Countries becomes 67th member 54.4% 2017 Lebanon became a country of operation and the Bank also Others commenced operations in West 10.1% Bank and Gaza EBRD 2018 India and San Marino become region excluding members EU 8.2% 2019 Libya becomes a member 1. Includes European Community and European Investment Bank (EIB) each at 3%. Among other EU countries: France, Germany and Italy each hold 8.6%

3 EBRD Largest investor in the region Since 1991, EBRD invested over €147 EBRD Top 10 investee countries in 2020 (€m) billion in more than 5,984 projects Highest credit rating 1 Turkey 1,675 14 160 (AAA/Aaa) 2 Egypt 1,046 140 12 Bank Cumulative Net €30 billion 3 812 120 10 capital base 0.4 Investment 4 797 0.7 0.4 0.2 100 1.3 0.8 8 0.9 1.2 Private sector 80 accounted for share of 5 Poland 789 6 79% 60 6 Morocco 742 9.2 8.2 8.5 8.5 4 7.5 7.7 7.9 Debt 6.9 40 84% 7 Serbia 679 2 20 Equity 8 Georgia 618 Annual Business Investment (ABI) Investment Business Annual 0 0 4% 2013 2014 2015 2016 2017 2018 2019 2020 9 Uzbekistan 429 Guarantees Debt Equity Net Cumulative Bank Investment 12% 10 Kazakhstan 403 4 EBRD’s financing instruments Exact terms depend on specific needs and market conditions Debt Equity Guarantees Typical size €1 – 300 mln (average € 20 mln) Typically €50 k – €50 mln

Typically 5-7 years Typically from 3-7 years 1 month to 3 years Maturity Up to 15 years

Currency/terms Major foreign currencies or local currency; floating/fixed Corporate loans Trade Facilitation Programme with Minority stake (max. 35%) Approach Project loans banks • Senior, subordinated, • Pure or “structured” • Trade finance guarantees & convertible loans or bonds Structures equity cash advances • Project finance • Capex for expansion/modernisation, including resource • Guarantee of issuing banks in efficiency improvements countries of operations in • Ownership change: acquisition, consolidation, privatisation Applications favour of confirming banks in • PPPs the rest of the world • Working capital

5 EBRD COVID-19 response

• First MDB to agree a crisis response package (March 2020). • Commitment to counter the economic impact of coronavirus. • €21 billion financial support. Investments + policy + advisory. • Solidarity package  Streamlined process - short-term liquidity and w/c needs of existing clients.  Expanded financing under the Trade Facilitation Programme.  Fast track restructuring of distressed clients.  Enhanced frameworks especially to SMEs -> resilient economy.  Vital Infrastructure Support Programme - essential infrastructure (w/c, stabilisation and essential public investment).

6 Natural Resources at a glance

30+ bankers 195 EUR 9.35 billion EUR 4 billion in London, Istanbul, Cairo, Kiev, Equity and debt projects Investments since 1991 Debt and equity portfolio Astana, Almaty, Ulaanbaatar. In- house engineering expertise

Key sectors include: Oil & Gas up/mid/downstream, base metals (Cu, Zn, Fe, Cr), precious metals (Au, Ag, PGM), industrial minerals, metallurgical coal, services providers.

Operating assets by sub-sector Portfolio by region 2% Mining C. Asia & Mongolia 9% 16% E. Eur. & Caucasus 7% O&G Extraction and 30% Central Europe 39% Remediation Oil&G Transportation and 11% Russia 19% Trade S. E. Mediterranean Oil Refining & 16% S. E. Europe Distribution Support & Services 23% Turkey 24% 1% 4% Greece

7 Recent transactions

Mining Junior/mid-tier miners Mining majors Polymetal International Plc Kincora Copper Services (drilling) Yildirim – Voskhod Chrome Baykirchik Mining Venture JsC ShalkiyaZinc Ltd. Tumad Madencilik A.S. 2018-2017, Kazakhstan 2017, Mongolia 2018, Kazakhstan 2017, Kazakhstan 2020, Turkey USD 140 million CAD 1.4 million USD 29 million EUR 175 million USD 50 million Minerals Senior Loan USD 60million Equity investment Senior A/B Loan Senior Loan Senior loan Drilling and exploration Precious and Base Metals Chrome mine Lead-zinc- mine Gold mines development restructuring & expansion Gold mine programme expansion Industrial Minerals development Metallurgical coal Products Lydian International Adriatic Metals Project Finance Compagnie Miniere Dundee Precious Metals Oksut Madencilik de Toussit 2016, Armenia 2020, Bosnia & Herzegovina Corporate Debt 2016, Morocco 2016, 2016, Turkey CAD 11.4 million GBP 6.2 million EUR 28 million CAD 43 million USD 75 million Revolver Debt Equity Equity investment Senior Loan Equity investment Senior Loan Bonds Gold mine Lead-zinc-silver mine Gold mine Silver-Zinc mine Gold mine Pre-development Mezzanine / Convertible debt development upgrade development development Listed equity (IPO, SPO) Private equity (structured)

TC Assistance Centerra Gold Maya Gold & Silver Oyu Tolgoil Altai-Polymetali Yildirim – Voskhod Chrome

Energy/Resource Efficiency 2016, Kyrgyzstan/Mongolia 2015, Morocco 2015, Mongolia 2015, Kazakhstan 2015, Kazakhstan Regulator E&S Capacity USD 150 million USD 6 million USD 1.2 billion USD 100 million USD 130 million Revolver debt facility Senior loan Senior A/B loan Senior loan Senior A/B loan EITI Accession Gold mines expansion and Silver mine Copper-gold mine Copper-Gold mine Chrome mine Gender/Inclusion Programmes development modernisation expansion development restructuring & expansion SOE Corporate Governance Case study (2017): Tümad Gold Mines

EBRD finance Tümad Madencilik Sanayi ve Ticaret Senior loan of A.Ş. (Tümad), a subsidiary of Nurol Holding. US$40m Use of proceeds and EBRD value added/impact

• USD 200m project co-financed • Promotion of economic inclusion. with Ziraat and Akbank. • Operational efficiency/dry stacking at • Development of Lapseki and Lapseki. Ivrindi gold mines. • Implementation of international standards and E&S practices.

Environmental Impact (i) Address livelihood issues for the mine sites and all associated facilities. (ii) Adopt specific measures to manage and avoid cyanide-related risks. Project Summary Document: (iii) Put in place dust control measures to minimise impacts on air quality. https://www.ebrd.com/work-with- us/projects/psd/tumad-gold-mines- development-loan.html 9 Case study (2020): Tümad Gold Mines

EBRD finance Tümad Madencilik Sanayi ve Ticaret Senior loan of A.Ş. (Tümad), a subsidiary of Nurol Holding. US$50m Use of proceeds and EBRD value added/impact

• USD 255m project co-financed • Strengthen balance sheet and with Ziraat and Akbank. liquidity. • Support project completion. • Support current transition impact. • Focus on the long-term • US$ 100K TC program for economic development of the Sponsor's inclusion. businesses.

Environmental Impact (i) Ongoing monitoring of the existing ESAP implementation. (ii) Further improvement in management of HSS issues. Project Summary Document: (iii) Supplementary ESIA for the Lapseki underground mining (new element) https://www.ebrd.com/work-with- us/projects/psd/tumad-sub-loan.html

10 Contacts

Eric Rasmussen Hande Islak Director, Head of Natural Resources Deputy Head of Turkey, Corporates Tel: +44 20 7338 8615 Tel: +90 212 386 1100 Email: [email protected] Email: [email protected]

Ulmas Musaliev Principal Banker Natural Resources Tel: +90 212 386 1182 Email: [email protected]

Natural Resources Team | EBRD Headquarters One Exchange Square | London EC2A 2JN | United Kingdom 11