TIDMIMIC
RNS Number : 7209B
Intl Mining & Infrast Corp PLC
08 October 2015
8 October 2015
INTERNATIONAL MINING & INFRASTRUCTURE CORPORATION PLC
("IMIC" or the "Company")
Operational and Financial Update
International Mining & Infrastructure Corporation plc (AIM:
IMIC), the Company focused on unlocking the value of iron ore in
Africa, provides an operational and financial update.
Operational update
IMIC is pleased to announce that it has completed a detailed
scoping study covering the 4 million tonnes per annum (mtpa) Ntem
project, which confirmed the project's economic viability - even at
current international iron ore prices. The Company is now engaged
in discussions with various parties in relation to financing and
preparing the project's next stage, a pre-feasibility study and the
definitive feasibility study. The scoping study demonstrated that
the Ntem project is capable of generating favourable financial
returns, even in the current cyclical downturn in global iron ore
prices, and that its final product, high-quality 70% Fe pellet
feed, is likely to attract significant demand in Europe and the
Middle East.
The Company has assessed capex options for the Ntem project in
light of the scoping study, and is in negotiations with potential
partners on "Build-Own-Operate-Transfer" solutions for the
project's slurry pipeline, beneficiation plant, contract mining,
port and power components - thus limiting the Company's direct
expenditure to the project's development costs to a relative
minimum while advancing the project towards production far more
quickly than if IMIC were to undertake all of these works in-house
or subcontract them to multiple service providers. Additionally,
the Company is studying midstream and downstream industrial options
for converting Ntem iron ore to intermediate iron and/or primary
steel products in Cameroon, for local/regional consumption and
export, in addition to reviewing export opportunities.
Nkout
The Company also continues to work on the pre-feasibility study
of the world class 35 mtpa Nkout project, including the assessment
of a range of infrastructure, production and capex scenarios,
allowing continued advancement of the asset notwithstanding the
current cyclical weakness in global iron ore prices.
Cost management
In light of current market conditions caused by the cyclical
reduction of iron ore prices since 2013, the Company has taken
steps to reduce and manage costs more effectively. This has been
achieved through reduction in head count both at the corporate
level in London as well as at the operational level in
Cameroon.
These measures are in addition to the Company's Ntem and Nkout
projects being currently operated locally on a care and maintenance
basis, following the completion of drilling campaigns and the
release of updated resource statements on 3 March 2015 and 6
October 2014.
Finance update
The Company currently has outstanding debt obligations of
US$100.5 million, excluding convertible loan notes issued as
deferred consideration for the Afferro Mining Inc ("Afferro")
acquisition (the "Acquisition"), which requires interest servicing
of approximately US$5 million per annum.
The Company is in advanced discussions with existing bondholders
in relation to freezing an interest payment of US$3.1 million, due
in October 2015, for a period of 24 months and suspending all
remaining interest payments on the bonds also for a period of 24
months.
The Company has further engaged with certain existing
bondholders who have indicated an interest in providing new funds
to support working capital requirements. The process to complete
this additional fundraising is ongoing.
At this stage, there can be no certainty as to the outcome of
these discussions. Should the Company fail to secure additional
financing, the board of directors of IMIC considers it likely that
the Company could become insolvent and insolvency proceedings, such
as administration or liquidation, may be commenced.
Further updates on the progress of this financing will be made
as appropriate.
Capital gains tax claim
Caminex SA, IMIC's 100 per cent. owned subsidiary, and its
principal operating company in Cameroon, received, on 7 August
2015, a demand for payment of tax, including capital gains tax, a
registration/transfer of ownership fee and tax interest and
penalties, of approximately US$2.6 million from the Tax Authorities
in connection with the 2013 Acquisition of Afferro and its local
Cameroonian subsidiary, Caminex SA, the entity which holds IMIC's
iron ore licences located in Cameroon (the "Tax Charge").
The Company has subsequently consulted professional tax and
legal advisers who have confirmed that the Tax Charge does not
comply with Cameroonian tax law as applicable at the time of the
Acquisition, and that the total amount of tax demanded is without
justification. The Company is also of the view that, logically, it
is the seller of Afferro, and not IMIC as the acquirer, that might
potentially have realised any capital gain as a result of the
Acquisition by IMIC.
The Tax Authorities have instigated an aggressive recovery
process, which has included the freezing of bank accounts of
Caminex SA on 22 September 2015 and closing its Cameroonian
offices, which occurred on 30 September 2015. The Tax Authorities
have granted leave for the Company to appeal its decision, but this
is conditional on IMIC paying a deposit of 15 per cent. of the
disputed tax amount. The Company continues to contest the position
of the Tax Authorities since it regards this as a spurious tax
claim and not in accordance with Cameroonian tax legislation.
The Company is taking urgent steps with the relevant authorities
to further clarify and rectify the situation and will make further
announcements as appropriate.
Resignation of Nominated Adviser
As per the Company's earlier announcement of today the Company
is now actively seeking a new Nominated Adviser in order to restore
normal trading.
For further information, please contact:
International Mining & Infrastructure www.imicplc.com
Corporation plc
Ethelbert Cooper, Chairman
Haresh Kanabar, Chief Financial +44 (0) 20 7290
Officer 3340
Pareto Securities Limited - Sole www.paretosec.com
Broker +44 (0) 20 7786
Guy Wilkes / Will Slack 4370
Buchanan - Financial PR www.buchanan.uk.com
Mark Court / Sophie Cowles +44 (0) 20 7466
5000
About IMIC
IMIC's strategy is, in conjunction with its partner AIOG,
working to develop fundable solutions to infrastructure provision
for iron ore resources in West and Central Africa. In support IMIC
will seek to acquire interests in iron ore projects that would
benefit from a specific infrastructure solution. IMIC made its
first investment with the Dec 2013 acquisition of Afferro Mining
Inc, taking ownership of four iron ore deposits in Cameroon, the
most advanced asset being Nkout. IMIC plans to continue to develop
its assets, including accelerating the feasibility studies of the
smaller Ntem deposit, which is located only 80km from Kribi deep
water port.
IMIC's focus will initially be on iron ore opportunities in West
and Central Africa. The demand for iron ore is currently being
driven by China which consumes approximately 70 per cent. of the
world's current annual production. As the urbanization of China
continues demand for iron ore is expected to remain at significant
levels through to 2030. The iron ore projects currently identified
in West and Central Africa have the potential to produce at least
400 million tonnes of iron ore each year. This would establish
Africa as a global player, alongside Australia and Brazil, in the
iron ore industry.
In order to help deliver its infrastructure solutions, IMIC and
AIOG have established strategic partnerships with various Chinese
state owned companies. These companies are involved in railway and
port construction, power, iron ore beneficiation and iron ore
marketing. These relationships are intended to give IMIC and AIOG
the ability to work with relevant governments and financial
institutions to deliver infrastructure solutions and to guarantee
the onward sale of iron ore in China and other emerging world
markets.
IMIC shares are traded on the London Stock Exchange's AIM market
under the ticker symbol IMIC.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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