African Minerals Ltd Financing Update (6258X)
November 20 2014 - 12:36PM
UK Regulatory
TIDMAMI
RNS Number : 6258X
African Minerals Ltd
20 November 2014
20 November 2014
African Minerals Limited
("African Minerals", "AML", or the "Company")
FINANCING UPDATE
African Minerals Limited, the developer, operator and 75% owner
of the Tonkolili Iron Ore Project (the "Project") in Sierra Leone,
today provides a financing update.
Trading of the Company's ordinary shares was suspended at
7:55a.m. this morning, pending a further announcement by the
Company.
As previously announced on 12 November 2014, the Company
continues to engage with Shandong Iron and Steel Group ("SISG")
over the timing of the release of restricted cash of $102m. SISG
had previously agreed to the release of this restricted cash in
August 2014, but since that time, SISG's authorisation has not been
forthcoming. Despite the Company's best efforts to reach an
agreement with SISG over the release of these funds, there remains
no certainty on the timing of their release.
In the meantime, the Company has been progressing negotiations
for alternative funding to finance working capital until the
Project becomes cash flow positive. Despite intensive efforts, in
the last few days it has become increasingly apparent that
alternative sources of funding are unlikely to materialise in the
near future.
In the absence of the release of the restricted cash or
availability of alternative sources of funding, in order to address
the immediate liquidity issues which the Project currently faces,
the Company is seeking to engage with SISG and other parties over a
partial disposal of its holding in the Tonkolili mine for a fair
market value. Such a disposal may result in release of the
restricted cash by SISG and/or allow AML to inject additional funds
into the Project, as well as potentially strengthening the
Company's own financial position.
Furthermore, Standard Chartered Bank had been mandated by the
Project to structure a new debt facility. Since the announcement on
12 November 2014, due to a further deterioration in market
conditions, the Company and Standard Chartered Bank have reached a
view that any structuring of a new debt facility is not currently
possible.
There can be no certainty that any partial disposal of the
Company's interest in the Tonkolili mine will materialise, and even
if concluded, there is no certainty of the timing or financial
outcome of such a transaction.
The Company's ordinary shares will remain suspended pending
clarification of the Company's financial position.
Contacts:
African Minerals Limited
+44 20 3435 7600
Matthew Hird / Francis O'Neill
Tavistock Communications
+44 20 7920 3150
Jos Simson / Nuala Gallagher / Mike Bartlett
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
END
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