Sierra Rutile Limited Standby Facility Update (0298A)
24 September 2015 - 4:01PM
UK Regulatory
TIDMSRX
RNS Number : 0298A
Sierra Rutile Limited
24 September 2015
Sierra Rutile Limited
Standby Facility Update
London, UK, 24 September 2015: Sierra Rutile Limited (AIM: SRX)
("Sierra Rutile") is pleased to announce that it has secured a
standby loan facility of US$15 million from Nedbank (the "Nedbank
Standby Facility"). The Nedbank Standby Facility replaces the
facility provided by Pala Investments (the "Pala Standby
Facility"), which was announced on 21 April 2015, and may be
utilised, if required, to fund the construction of Phase 1 of the
Gangama Dry Mine (the "Project"), which remains on budget and on
track to commence production in late Q2 2016.
The Nedbank Standby Facility, like the Pala Standby Facility it
replaces, provides financial flexibility to Sierra Rutile during
the construction phase of the Project. The cost of the Nedbank
Standby Facility, if drawn, is less than the Pala Standby Facility
with an interest rate of LIBOR plus 2% (compared with the Pala
Standby Facility which carried an interest rate of LIBOR plus
5.25%). The Nedbank Standby Facility has no associated arrangement
or commitment fees. Any funds which Sierra Rutile wishes to draw
from the Nedbank Standby Facility will be secured by an equivalent
amount of cash collateral to be provided by Pala.
Further, to provide flexibility to manage its working capital
requirements more efficiently during the construction phase of the
Project, Sierra Rutile will also be able to access cash received
from its sales that would have normally been restricted between
interest periods under the terms of the existing US$20 million
working capital facility from Nedbank (the "Working Capital
Facility"). Access to such restricted cash between interest
periods, if requested by Sierra Rutile, will be similarly backed by
cash collateral provided from Pala.
Sierra Rutile and Pala have entered into a cash collateral
agreement (the "Cash Collateral Agreement") under which Sierra
Rutile will pay an interest rate of 1% on any cash collateral which
it may request from Pala under the Nedbank Standby Facility and the
Working Capital Facility, and under which Sierra Rutile agrees to
repay Pala in respect of any cash collateral which is claimed by
Nedbank. Under the AIM Rules, the Cash Collateral Agreement is
classified as a related party transaction. The directors of Sierra
Rutile (with the exception of Michael Barton, Michael Brown and
Stephen Gill, employees of Pala), having consulted with Sierra
Rutile's nominated adviser, Investec Bank plc, consider that the
terms of the Cash Collateral Agreement are fair and reasonable
insofar as Sierra Rutile's shareholders are concerned.
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 +44 (0)20
John Prior / Paul Gillam 7260 1000
Kreab
Marc Cohen / Christina +44 (0)20
Clark / Fiona Cumberland 7074 1800
About Sierra Rutile Limited
Sierra Rutile produces titanium feedstock industrial minerals
(primarily rutile, with some associated ilmenite), as well as
smaller quantities of zircon. Sierra Rutile's mines, located in the
south west of Sierra Leone, are based on one of the largest natural
rutile deposits in the world, with a JORC-Compliant Mineral
Resource for measured, indicated and inferred resources for the
Sierra Rutile mine of over 895 million tonnes (as at 30 September
2014).
www.sierra-rutile.com
This information is provided by RNS
The company news service from the London Stock Exchange
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