Leases

Capital Leases

On June 14, 2013, we entered into a sale-leaseback transaction with Caterpillar Financial Services Limited ("Caterpillar") with respect to certain Endako Mine equipment (the "Endako Sale Lease-Back"). We received $5.3 million in cash from Caterpillar for the sale of this equipment, which was subsequently leased back, after an upfront down payment of $1.4 million. The lease is considered to be a capital lease, with interest payments based on a fixed rate of 5.85%. The agreement includes certain non-financial covenants, and as of September 30, 2013, we were in compliance with these covenants. As of September 30, 2013, this resulted in a capital lease obligation of $3.8 million. For the three and nine months ended September 30, 2013, TCM incurred and paid $0.1 million of interest associated with the Endako Sale Lease-Back.

On March 30, 2011, TCM entered into an equipment financing facility with Caterpillar, as amended from time to time (the "Equipment Facility"), pursuant to which 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 a floating rate of LIBOR+3.45% or fixed rates ranging from 5.30% to 5.60%, at TCM's option. TCM's ability to borrow under the Equipment Facility terminates in September 2014 (as agreed 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 September 30, 2013, TCM was in compliance with these covenants.

During the first half of 2013, TCM entered into two additional sale-leaseback transactions with Caterpillar under the Equipment Facility. Interest payments are based on a fixed rate of 5.50%.

As of September 30, 2013, TCM had received $37.8 million in cash from Caterpillar for the sale of equipment, which was subsequently leased back. 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.

As of September 30, 2013, TCM had $88.4 million in outstanding borrowings under the Equipment Facility. 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 nine months ended September 30, 2013, TCM capitalized $0.9 million and $3.7 million, respectively, of the interest and debt issuance costs associated with the Equipment Facility, and paid $1.4 million and $3.5 million, respectively, of interest related to the Equipment Facility.

During the three and nine months ended September 30, 2012, TCM capitalized $0.5 million and $0.8 million, respectively, of interest and debt issuance costs associated with the Equipment Facility and paid $0.1 million and $0.4 million, respectively, of interest related to the Equipment Facility.

Beginning in September 2013, in conjunction with the start-up phase at Mt. Milligan, TCM ceased capitalizing the interest and debt issuance costs associated with the leases under the Equipment Facility for Mt. Milligan as the related assets were placed in service. During the three and nine months ended September 30, 2013, TCM expensed $0.5 million of interest and debt issuance costs associated with the Equipment Facility.

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



(in millions)	September 30, 2013		December 31, 2012
Equipment capital leases	$	25.3	$	29.8
Equipment facility sales-leaseback	63.1		42.3
Total obligation under equipment facility	88.4		72.1
Endako sale-leaseback	3.8		—
Total capital lease obligation	$	92.2	$	72.1