12th Nov 2014 16:28
LONDON (Alliance News) - African Minerals Ltd said Wednesday that it is progressing negotiations for alternative funding to finance its Tonkolili iron ore project in Sierra Leone until it becomes cash flow positive, in light of its ongoing operating losses and debt repayments.
However, it said it believes there are "reasonable prospects that alternative funding can be achieved in the near future."
Amongst the options it is considering to strengthen its financial position, African Minerals is potentially looking at selling part of its holding in Tonkolili.
African Minerals said Standard Chartered Bank has been mandated to structure a new facility, the proceeds of which will be applied to the refinancing of its pre-export finance facility as well as capital expenditure related to the project's phase-two transition, and it is engaged with holders of its convertible bond with a view to reducing debt.
The company has seen USD182 million released from the Hong Kong bank accounts of the project, which has been used to finance working capital, leaving a balance of USD102 million. It is continuing discussions with two shareholders over the timing of the release of USD61 million, and the final USD41 million, but noted there was no certainty of the timing of these releases.
African Minerals is trading up 55% at 15.50 pence near the close Wednesday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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