DAMMAM: Saudi Arabian Mining Company (Maaden) aims to close fundraising for its $7 billion phosphate project before the end of the year, and talks with lenders are progressing well, its chief executive said.

The cash will be used to fund the Umm Wual development at Waad Al-Shimal City in the north of the country, as well as connected infrastructure at Ras Al Khair on the east coast of the Kingdom.

The project is a joint venture, with Maaden holding a majority stake and Saudi Basic Industries Corp. and Mosaic 15 and 25 percent, respectively.

Local and foreign commercial banks have been approached for the financing, as well as two Saudi government funds — the Saudi Industrial Development Fund and Public Investment Fund — and

export credit agencies (ECAs), including ones from South Korea, Khalid Al-Mudaifer said late on Tuesday on the sidelines of an industry event in Dammam.

"There is big progress and hopefully we will finalize it before the year ends," Mudaifer said, adding that it was in the process of receiving commitments.

Project Finance International, a Thomson Reuters unit, reported last month that commercial banks would be asked to commit around $3.1 billion, with around $1.9 billion to come from the two Saudi state funds and the rest from ECAs.

A banker with knowledge of the deal said on Wednesday that the tranche of cash earmarked for commercial banks would likely be "significantly oversubscribed".

Al-Mudaifer said Maaden expects to raise its gold production to 500,000 ounces per year by 2017, up from just over 137,000 ounces in 2012, despite a slide in gold prices.

"When it comes to gold prices, they went down but are still good for our investments," he said.

"The cost of resources and extraction in Saudi of our projects are all very low so we do not have a decrease and so they are still feasible."

In October, Maaden said its third-quarter net profit more than trebled on the back of contract receipts from a phosphate joint venture, which helped offset declines in its gold and other fertilizer businesses.