African Minerals Ltd Financing Update (8779W)
12 November 2014 - 5:04PM
UK Regulatory
TIDMAMI
RNS Number : 8779W
African Minerals Ltd
12 November 2014
12 November 2014
African Minerals Limited
("African Minerals", "AML", or "the Company")
FINANCING UPDATE
African Minerals Limited, the developer, operator and 75%
shareholder of the Tonkolili Iron Ore Project (the "Project") in
Sierra Leone, today provides a financing update.
Further to the announcement made on 19 September 2014 relating
to the release of funds from the Hong Kong bank accounts of the
Project, the Company confirms that since then $182m has been
released from those accounts and used to finance working capital,
leaving a balance of $102m.
Discussions are continuing between the two shareholders in the
Project, AML and Shandong Iron and Steel Group, over the timing of
the release of $61m (previously approved by the Project Companies'
Boards for release in October) and the final $41m, and there is no
certainty on the timing of these releases.
In light of its ongoing operating losses and debt repayments,
the Company is progressing negotiations for alternative funding to
finance working capital until the Project becomes cash flow
positive. The Company believes there are reasonable prospects that
alternative funding can be achieved in the near future.
As announced in the interim results on 30 September 2014, the
Company is evaluating other opportunities to strengthen the capital
structure of the Company, both at AML and Project level. Standard
Chartered Bank has been mandated by the Project Companies to
structure a new facility, the proceeds of which will be applied to
the refinancing of the pre-export finance facility as well as
capital expenditure related to the Project's phase 2 transition.
The Company, advised by Jefferies, is also engaged with the holders
of the convertible bond with a view to reducing the debt servicing
burden in the short to medium term. The Company is also considering
a part disposal of its holding in the Project to strengthen the
financial position of AML.
Contacts:
African Minerals Limited
+44 20 3435 7600
Matthew Hird / Francis O'Neill
Tavistock Communications
+44 20 7920 3150
John West / Jos Simson / Nuala Gallagher
Jefferies
44 20 7029 8000
Nick Adams / Alex Collins
About African Minerals
African Minerals operates the Tonkolili Iron Ore Project (the
"Project") in Sierra Leone, with a JORC compliant resource of
12.8Bnt. The Project, which currently has a 60+ year mine-life, is
being developed in a number of staged expansions. In 2013, African
Minerals completed sales of 12.1Mt to its customers. The current
year sales guidance is for 16-18Mt of exports as the operations
focus on operating at the 20Mtpa run rate design capacity.
Phase II expansion contemplates the production of an expanded
tonnage including the establishment of a high grade concentrate
product with the project ramping up to 25Mtpa.
The Company has also developed significant port and rail
infrastructure to support the operation of the Project, via its
subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in
which the Government of Sierra Leone ("GoSL") has a 10% free
carried interest.
The Project companies are currently owned 75% by AML, and 25% by
Shandong Iron and Steel Group ("SISG"), except for ARPS, which is
currently owned 75% by AML and 25% by SISG, with the GoSL having
the right to a 10% free carried interest from AML.
www.african-minerals.com
This information is provided by RNS
The company news service from the London Stock Exchange
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