Al­phamin ar­ranges $80M (U.S.) credit line for Bisie

Stockwatch Daily - - MINES & METALS - Mr. Boris Kam­stra re­ports

AL­PHAMIN RE­SOURCES Corp. has se­cured a credit fa­cil­ity of $80-mil­lion (U.S.) from a syn­di­cate of lenders for the con­struc­tion of the Bisie tin mine (the ABM project) in the Demo­cratic Repub­lic of the Congo.

Highlights:

• Project debt fi­nanc­ing now se­cured with credit agree­ment signed with a syn­di­cate of lenders for an $80-mil­lion (U.S.) credit fa­cil­ity;

• Com­mit­ments re­ceived for 55 per cent of the re­main­ing to­tal eq­uity fi­nanc­ing re­quired to com­plete con­struc­tion and fi­nal eq­uity raise has com­menced and tar­geted for com­ple­tion this quar­ter;

• Con­struc­tion of the ABM project pro­gress­ing well;

• Project com­mis­sion­ing sched­uled to com­mence early in 2019 and achieve steady state pro­duc­tion be­fore the end of 2019. A de­fin­i­tive credit agree­ment has been signed by Al­phamin with Sprott Pri­vate Re­source Lend­ing (Col­lec­tor) LP, Barak Fund SPC Ltd. and Tre­mont Master Hold­ings in re­spect of an $80-mil­lion (U.S.) se­nior se­cured, non-re­volv­ing, term credit fa­cil­ity to be pro­vided to Al­phamin’s 80.75-per-cent-owned sub­sidiary, Al­phamin Bisie Min­ing SA (ABM), as bor­rower, for the con­tin­ued de­vel­op­ment of the ABM project.

“We are very pleased that Sprott and Barak have com­mit­ted to part­ner with our ex­ist­ing ma­jor share­holder, Tre­mont, to pro­vide the debt fi­nanc­ing needed for the ABM project, as a step in draw­ing the fundrais­ing process to­wards a close and de­liv­er­ing on our com­mit­ment to stake­hold­ers to bring the ABM project into pro­duc­tion,” said Boris Kam­stra, chief ex­ec­u­tive of­fi­cer of Al­phamin. “The ABM project is ad­vanc­ing and our team has made ex­cel­lent progress in the con­struc­tion of the mine and as­so­ci­ated in­fra­struc­ture. The com­ple­tion of the box cut for the un­der­ground por­tal of the mine is an­other key risk mit­i­gat­ing mile­stone for the project. We’ve also re­ceived com­mit­ments for the ma­jor­ity of the re­main­ing eq­uity fund­ing re­quire­ment, so we are ex­cited to move this for­ward with every­one in­volved.”

To date, Al­phamin has se­cured in ex­cess of 80 per cent of the re­main­ing fi­nanc­ing needed for the ABM project, which in­cludes this $80-mil­lion (U.S.) credit fa­cil­ity, $13.7-mil­lion (U.S.) com­mit­ment from the In­dus­trial De­vel­op­ment Corp. of South Africa Ltd. (IDC), and $24.7-mil­lion (U.S.) com­mit­ment from Tre­mont. As a re­sult, Al­phamin will now fo­cus on rais­ing the fi­nal $31.4-mil­lion (U.S.) of eq­uity to com­plete the ABM project. Credit fa­cil­ity terms

The credit fa­cil­ity pro­vides for an ini­tial ad­vance of $10-mil­lion (U.S.). The bal­ance of $70-mil­lion (U.S.) will be­come avail­able fol­low­ing the sat­is­fac­tion of cer­tain sub­se­quent con­di­tions prece­dent, in­clud­ing, in­ter alia, the com­pany com­plet­ing an eq­uity fi­nanc­ing of a min­i­mum of $50-mil­lion (U.S.) net of as­so­ci­ated costs (of which $24.7-mil­lion (U.S.) has been

com­mit­ted by Tre­mont as its par­tic­i­pa­tion pro-rata to cur­rent own­er­ship).

Over­all fi­nanc­ing up­date The ABM project has a peak fi­nanc­ing re­quire­ment of $172.1-mil­lion (U.S.), in­clud­ing a to­tal con­tin­gency of $23-mil­lion (U.S.) ($8-mil­lion (U.S.) pre­vi­ously). To date, $140.7-mil­lion (U.S.) has been raised and com­mit­ted, cov­er­ing in ex­cess of 80 per cent of the to­tal peak fi­nanc­ing re­quire­ment.

(See AFM Ta­ble 1 on page 3)

Eq­uity fi­nanc­ing Al­phamin is now com­menc­ing the rais­ing of the fi­nal eq­uity re­quired to com­plete the ABM project. Al­phamin in­tends to raise up to $56.1-mil­lion (U.S.) in the planned eq­uity fi­nanc­ing, with Tre­mont com­mit­ting to par­tic­i­pate in the amount of $24.7-mil­lion (U.S.). This fi­nal eq­uity raise is in progress and is ex­pected to close be­fore year-end. Pric­ing and other of­fer­ing terms will be an­nounced as soon as de­ter­mined.

Bridge loan

To en­able the ABM project to con­tinue on its crit­i­cal path de­vel­op­ment time­line with­out in­ter­rup­tion, Al­phamin has se­cured a $5.7-mil­lion (U.S.) bridge loan from Tre­mont. The bridge loan is un­se­cured and re­payable from the pro­ceeds of the next eq­uity fi­nanc­ing by ABM no later than Jan. 31, 2018.

Tre­mont owns 44.1 per cent of the out­stand­ing com­mon shares of Al­phamin. As a re­sult of the par­tic­i­pa­tion in the credit fa­cil­ity, and the bridge loan pro­vided by Tre­mont, the credit fa­cil­ity and bridge loan are both considered to be re­lated party trans­ac­tions.

We seek Safe Har­bor.

Karen Bax­ter con­densed this news re­lease (karenb@stock­watch.com).

Paul Baloyi, Brett Childs, Bren­don Howard Jones, Boris Richard Kam­stra, Charles Denby Stock­ton Need­ham, Eoin O’Driscoll, Ru­dolf Pre­to­rius, Bernard Swanepoel

(AFM) Shares: 495,643,461

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