Alecto Minerals PLC Update on Matala Mine financing (3904P)
November 17 2016 - 2:00AM
UK Regulatory
TIDMALO
RNS Number : 3904P
Alecto Minerals PLC
17 November 2016
Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector:
Mining
17 November 2016
Alecto Minerals plc ('Alecto' or the 'Company')
Update on Matala Mine financing
Alecto Minerals plc (AIM: ALO), the Africa-focused gold and base
metal exploration and development company, is pleased to provide an
update on its financing activities for the Matala Gold Project (the
"Project") in south central Zambia.
The Company's financing plan, which was set out in its
announcements made in April 2016, is focused on obtaining vendor
financing from China. The Company continues to make good progress
with this proposed financing arrangement.
In April 2016, the Company announced that Yantai Xinhai
Machinery Company Limited ("Xinhai") had agreed to assist in
arranging the vendor financing - the first step to securing a
Chinese export bank funding agreement. At the end of May 2016, the
Company received a conditional term sheet from Xiamen XGMA
International Trade Company Limited ("XGMA") confirming that
agreement had been reached for the provision of risk cover and
Supplier's Finance from state owned China Export & Credit
Insurance Corporation ("Sinosure"). The Supplier's Financing Terms
included, inter alia, a requirement for security to be provided in
favour of the financing Chinese Bank that in turn requires
Ministerial approval in Zambia.
According to the term sheet provided by XGMA, it was expected
that the financing arrangements could be completed by the end of
September 2016. However, shortly after receipt of the term sheet,
parliament in the Republic of Zambia was dissolved ahead of
Presidential elections which were concluded on 8 September 2016,
with incumbent President Edward Lungu reconfirmed as the successful
candidate. On 28 September 2016, the Company received confirmation
from Sinosure that subject to a local institution holding the
security on behalf of the lender they would approve the risk cover
as previously envisaged.
On 10 October 2016, on resumption of parliament, approval from
the Honourable Christopher Yaluma, Minister for Mines and Mineral
Development in Zambia, was granted for the Company to encumber its
large scale mining licence in favour of the proposed financiers.
The Company is continuing to make good progress towards completing
the final arrangements in Zambia and has, since his re-election,
received the highest level of approval for its business plan from
the President in Zambia.
The Company is now focusing on completing the last leg of the
financing plan, which is to reach agreement with local Zambian
institutions for the provision of an on-lending facility and
additional security in order to facilitate the flow of funds from
China. Once the necessary guarantees have been agreed in principle
with a financial institution in Zambia, the Company will enter the
documentation phase with all parties to finalise the financing.
Subject to the agreement of final documentation, the Company
expects that Matala will be commissioned in 2017. Further updates
will be provided, as appropriate, as the financing progresses.
Mark Jones, Alecto CEO, commented:
"We made very rapid progress with our Chinese funding partners
at the beginning of this year, and it is regretful that we have
subsequently been unable to meet our original timeline for
completion. However, the external factors outside of our control
have required us to exercise patience as we seek to close the
financing.
"The Company, and our partners, are very excited about what will
be a true Zambian gold mining success story, and we are fully
committed to ensuring that it happens. Due to our size, satisfying
potential financiers of the merits of taking on project risk has
not been without its challenges, and progress has been slower than
we would have wished. However, our commitment to the process is
undimmed and we continue to believe that bringing Matala in to
production is the best way to realise value for shareholders.
"We are in the process of transforming Alecto on a number of
fronts, and we intend to be far more than simply a small gold
producer in one country. Our technical teams have been actively
engaged in our joint venture opportunities, as well as reviewing
and assisting with other potential business development activities,
throughout the last few months. We look forward to providing more
details on these activities in due course.
"I would like to personally thank our shareholders for their
patience during these difficult times, and reconfirm my commitment
to building Alecto into an important player in the African gold and
base metals market."
This announcement contains inside information.
**ENDS**
For further information, please visit www.alectominerals.com or
contact:
Alecto Minerals plc Tel: +44 (0)20 7499 5881
Mark Jones
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Andrew Emmott
Matthew Chandler
James Dance
Beaufort Securities Limited Tel: +44 (0)20 7382 8300
Jon Belliss
St Brides Partners Ltd Tel: +44 (0)20 7236 1177
Elisabeth Cowell
Charlotte Page
This information is provided by RNS
The company news service from the London Stock Exchange
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