TIDMSRX
RNS Number : 2244O
Sierra Rutile Limited
03 November 2016
Sierra Rutile Limited
Refinancing of Bank Debt Facilities and Repayment of Government
Loan
London, UK, 3 November 2016: Sierra Rutile Limited (AIM: SRX)
("Sierra Rutile") is pleased to announce that it has successfully
refinanced its debt facilities through Nedbank Corporate and
Investment Bank, a division of Nedbank Limited ("Nedbank CIB").
Highlights:
-- Extended maturity profile: The amortisation schedule has been
extended and weighted to later years
-- Improved operating flexibility: The new facilities provide greater covenant flexibility
-- Replacement of mobile mining equipment: Operational and
financial benefits with new mining fleet funded by equipment
finance facility
-- Additional liquidity: New revolving credit facility to provide additional liquidity
The refinanced debt facilities have consolidated all previous
debt facilities into a single senior term loan facility of US$50.0
million (the "Senior Term Loan Facility") and an equipment finance
facility of US$15.9 million (the "Equipment Finance Facility"). A
revolving credit facility of US$15.0 million (the "Revolving Credit
Facility") has also been arranged to provide additional liquidity.
The Government of Sierra Leone loan denominated in Euros,
equivalent to US$23.5 million, as at 30 June 2016, will be repaid
at financial close of the refinancing. Covenants attached to the
debt facilities provide greater flexibility than previous covenants
and are customary for a suite of corporate-style debt facilities of
this nature.
Senior Term Loan Facility
The Senior Term Loan Facility carries an interest rate of LIBOR
plus 6.25%. Political risk insurance will be arranged by Nedbank
CIB at no additional cost to Sierra Rutile. The final maturity date
of this facility is December 2021, with amortisation weighted from
2018 onwards. An accordion structure has been incorporated into the
facility such that the facility can be upsized from US$50.0 million
up to US$85.0 million to provide additional funding for future
development projects, such as the debt component of the Sembehun
project, subject to final project feasibility and customary
conditions. Any upsizing is also subject to Board approval.
Equipment Finance Facility
The Equipment Finance Facility allows Sierra Rutile to take
advantage of the current soft mining equipment market conditions
and optimise the current mobile mining fleet ahead of mid-life
rebuilds at competitive debt terms, lowering sustaining capital
requirements. This facility carries an interest rate of LIBOR plus
4.50%. The final maturity date of this facility is December 2019
with straight line amortisation to this date.
Revolving Credit Facility
The Revolving Credit Facility of US$15.0 million has been
arranged to sit alongside the other facilities to provide
additional liquidity should the need arise. The final maturity date
of this facility is December 2019. An interest rate of Libor plus
6.50% is charged on drawn balances under this facility.
Financial close of the new debt facilities is subject to
customary conditions. Upon financial close, the existing Nedbank
Standby Facility, which was secured by cash collateral provided by
Pala Investments, will be cancelled.
John Sisay, Sierra Rutile's Chief Executive Officer,
commented:
"I am delighted to announce the refinancing of our loan
facilities into a long term debt structure that better supports our
stated development plans. I would like to thank the Nedbank mining
finance team for their continued support of Sierra Rutile.
Furthermore, with the repayment of the loan to the Government, I
would like to extend my gratitude to the Government of Sierra Leone
for the past financial support which has been provided to Sierra
Rutile since the restart of operations in 2004."
Nivaash Singh, Nedbank CIB international mining finance head,
commented:
"We are pleased to continue this banking partnership with Sierra
Rutile through the implementation of a fit-for-purpose bank debt
package which supports Sierra Rutile's business plans. Nedbank CIB
will continue to support projects in Africa with strong management
teams and companies with quality shareholders. We remain excited to
work with Sierra Rutile as it continues to realise the full
potential of Sierra Rutile's world-class asset in Sierra
Leone."
Herbert Smith Freehills is retained as legal advisers to Sierra
Rutile, while Fasken Martineau is retained as legal advisers to
Nedbank CIB.
For Further Information:
Sierra Rutile Limited
Matthew Hird, Chief Financial
Officer
John Nagulendran, Company +44 (0)20
Secretary 7074 1800
Investec Bank
Nominated Adviser and Joint
Corporate Broker
Chris Sim / George Price +44 (0)20
/ Jeremy Ellis 7597 4000
RBC Capital Markets
Joint Corporate Broker +44 (0)20
Jonny Hardy 7653 4000
Numis Securities Limited
Joint Corporate Broker
John Prior / James Black +44 (0)20
/ Paul Gillan 7260 1000
Kreab
Christina Clark / Anna +44 (0)20
Gustafsson 7074 1800
About Sierra Rutile Limited
Sierra Rutile is a leading, multi-mine mineral sands company,
operating world-class assets and developing a portfolio of growth
projects in the south west of Sierra Leone, with its primary
commodity mined being natural rutile, a titanium feedstock. The
Company has an established operating history spanning approximately
50 years and a resource mine life of another 50 years with one of
largest natural rutile deposits in the world and a JORC-Compliant
Mineral Resource for measured, indicated and inferred resources for
the Sierra Rutile mine of over 866 million tonnes (as at 30
September 2015). Sierra Rutile expects to be the world's largest
primary producer of natural rutile in 2016 and its market-led,
long-term mine plan has the flexibility to adapt to customer
demand.
www.sierra-rutile.com
Forward-Looking Information
This document may contain forward-looking statements. These
forward-looking statements are made as of the date of this
announcement and Sierra Rutile Limited (the "Company") does not
intend, and does not assume any obligation, to update these
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required under applicable
securities legislation.
Forward-looking statements relate to future events or future
performance and reflect Company management's expectations or
beliefs regarding future events and future performance and include,
but are not limited to, statements with respect to the estimation
of mineral reserves and resources, the realization of mineral
reserve estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, success of
mining operations, environmental risks, unanticipated reclamation
expenses, title disputes or claims and limitations on insurance
coverage. In certain cases, forward-looking statements can be
identified by the use of words such as "plans", "expects" or "does
not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would",
"might" or "will be taken", "occur" or "be achieved" or the
negative of these terms or comparable terminology. By their very
nature forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the forward looking
statements. Such factors include, among others, risks related to
actual results of current exploration activities; changes in
project parameters as plans continue to be refined; future prices
of mineral resources; possible variations in ore reserves, grade or
recovery rates; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or
financing or in the completion of development or construction
activities; as well as those factors detailed from time to time in
the Company's interim and annual reports. These risks,
uncertainties, assumptions and other factors could adversely affect
the outcome and financial effects of the plans and events described
herein.
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward- looking
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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