Leases

Capital Leases

On March 30, 2011, TCM entered into an equipment financing facility, as amended from time to time (the "Equipment Facility"), pursuant to which Caterpillar Financial Services Limited ("Caterpillar") agreed to underwrite up to $132.0 million in mobile fleet equipment financing for the Mt. Milligan project. Each borrowing under the Equipment Facility represents a capital lease and has a term of 48 or 60 months. Interest on the amounts borrowed under the Equipment Facility is payable at either floating or fixed rates, at TCM's option. TCM's ability to borrow under the Equipment Facility terminates in December 2013 (or such later date as may be agreed upon by Caterpillar), and any unused commitments under the Equipment Facility will then terminate and no longer be available to TCM. At the end of each 48- or 60-month lease period, TCM has the option to purchase the underlying equipment for a nominal sum.

The Equipment Facility includes non-financial covenants, and as of June 30, 2013, TCM was in compliance with these covenants. As of June 30, 2013, TCM had $93.2 million in outstanding borrowings under the Equipment Facility and an additional $4.0 million in borrowings that were related to certain equipment at the Endako Mine ("Endako Sale-Leaseback") for a total of $97.2 million in outstanding borrowings. As of December 31, 2012, TCM had $72.1 million in outstanding borrowings under the Equipment Facility.

Interest pertaining to the Equipment Facility is allocable to the cost of developing mining properties and to constructing new facilities and is capitalized until assets are ready for their intended use. For the three and six months ended June 30, 2013, TCM capitalized $1.5 million and $2.8 million, respectively, of the interest and debt issuance costs associated with the Equipment Facility, and paid $1.2 million and $2.1 million, respectively, of interest related to the Equipment Facility.

During the three and six months ended June 30, 2012, TCM capitalized $0.3 million of interest and debt issuance costs associated with the Equipment Facility and paid $0.2 million of interest related to the Equipment Facility.

During the first half of 2013, TCM entered into three sale-leaseback transactions with Caterpillar with respect to certain equipment. Two of these transactions were pursuant to the Equipment Facility, while the other related to the Endako Sale-Leaseback. As of June 30, 2013, TCM had received $37.8 million in cash from Caterpillar for the sale of equipment, which was subsequently leased back. Interest payments are based on a fixed rate. The leases are considered capital leases resulting in an increase to TCM's capital lease obligation of $33.2 million after upfront payments of $4.6 million.

TCM's total capital lease obligations consisted of the following:



(in millions)	June 30, 2013		December 31, 2012
Equipment capital leases	$	26.7	$	29.8
Equipment facility sales-leaseback	66.5		42.3
Total obligation under equipment facility	93.2		72.1
Endako sale-leaseback	4.0		—
Total capital lease obligation	$	97.2	$	72.1