American Pacific will initially issue $2 million of convertible notes to Amvest.

The finance facility comprises a $37 million construction term loan and an $8 million cost overrun facility.

The term sheet grants exclusivity to Amvest on the transactions up until November 15, 2019. American Pacific has also agreed to pay Amvest for its costs and expenses of conducting due diligence and has already made a payment of $100,000.

The definitive feasibility study on the Fort Cady phase one project in California estimated capital costs of $36.8 million. The starter project delivers an EBITDA in the first year of operation of $26.7 million.

Phase one would produce 40,000 tonnes per annum of sulphate of potash and 6,000tpa of boric acid at C1 costs of $85.89 per tonne of SOP. The study returned a post-tax net present value of $224.7 million and internal rate of return of 58.3%.

"We are delighted to have signed a term sheet with a specialist mining New York-based investor for a facility to substantially debt fund the first phase of our Fort Cady borate project," American Pacific CEO and managing director Michael Schlumpberger said.

The convertible note and term sheet confirm our view that we have a very exciting project with exceptional financial metrics, which will produce two commodities with compelling market dynamics.

"Importantly, our focus continues to be on completing our engineering to enable the commencement of construction in the current calendar year."

Shares in American Pacific rose 7.5% to A28.5c, half a cent off a 52-week high.