Metals Exploration PLC AGM Statement (2645D)
25 June 2019 - 4:01PM
UK Regulatory
TIDMMTL
RNS Number : 2645D
Metals Exploration PLC
25 June 2019
METALS EXPLORATION PLC
AGM Statement
Metals Exploration plc (AIM: MTL) ("Metals Exploration" or the
"Company"), the natural resources exploration and development
company with assets in the Pacific Rim region, will hold its Annual
General Meeting ("AGM") today. At the AGM, Darren Bowden, Chief
Executive Officer, will provide the following statement:
"As you know I became the CEO of Metals Exploration earlier this
year. My appointment stemmed from a decision by the Board to seek a
new management team who could unlock the potential that remains in
Runruno. I actually began my initial work back in October 2018, in
a consulting capacity on behalf of the mezzanine lenders reviewing
the operations and issues that have plagued the mine since
commissioning.
"Once we had our feet on the ground, Mike Langoulant and I
reviewed the economics and financial position of the business and
it became abundantly clear to us that the current debt structure
was not tenable long term. As well as this, last year the Company
obtained some short-term mezzanine finance to provide working
capital in the absence of sufficient cash flow being generated by
the mine. As part of the reviews and knowing a lot more about how
the mine was able to operate and improve, we produced revised
economic models. These models are very different to the historical
models that the lenders were provided and are more in line with the
mine's continued economic potential. Accordingly, after all this,
it became immediately clear to us that we didn't have the money to
service this debt. This is why since early March 2019 the
management and Board have been in detailed negotiations with all
the Company's lenders to secure the short and long term future of
the Company.
"As we reported in January of this year, we discovered several
material discrepancies in the historical operational data released
to the market versus the mine's actual performance. In essence, the
BIOX was not working nearly as well as it should have been. As many
of you will know, the BIOX has been somewhat of a headwind for the
Company in the past and is still yet to be fully resolved, however
our new on site team have achieved some impressive results and we
at least now fully understand the issues and have options to solve
them. I'm pleased to say that our new team has put us in a position
where both the mine and the plant performance are improving. We
have been able to sustain a 66% overall processing recovery in 2019
against 57% in 2018 and have solutions (that require
additional/unfunded capital expenditure) to move to 85% in the
medium term. In January we took shareholders through the key issues
that were identified and our immediate actions to be undertaken.
All of the actions outlined in January were commenced with the new
mine plan being finalised as we speak and engineering commencing on
the design changes identified in the plant.
"Obviously, we are now only three days away from 28 June 2019
which is when the current standstill agreement falls away. Contrary
to what has been stated in some recent press articles negotiations
to restructure the debt are ongoing and the company is seeking to
extend the standstill ensuring time is available to reach a
conclusion. I appreciate that this has been a very difficult time
for you as shareholders of this company. It would be misleading to
give you any type of assurance that a new agreement will be reached
as we are in the hands of our lenders. What I can say though is
that we are trying everything we possibly can in this regard.
"It has been an extremely busy period since we started and while
we have already started making improvements, which have borne
fruit, we are not in a position to meet the debt repayments and
interest that you all know too well. With that, and given the
announcements of the last few months, I suspect you may have some
questions. I will do my best to answer them but as I'm sure you can
understand there may be some that I am unable to provide further
colour."
This Announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon
the publication of this Announcement, this inside information is
now considered to be in the public domain.
For further information please contact or visit
www.metalsexploration.com
Darren Bowden Chief Executive Officer +63 908 8500 051
Interim Chief Financial
Michael Langoulant Officer +44 (0)7899 249990
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Nominated & Financial Adviser STRAND HANSON LIMITED
& Broker:
James Spinney, James Dance, Eric
Allan +44 (0) 207 409 3494
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Public Relations: TAVISTOCK
----------------------
Jos Simson, Barnaby Hayward +44 (0)207 920 3150
----------------------
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END
AGMUSORRKWANUUR
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