18th Aug 2014 14:46
LONDON (Alliance News) - Bellzone Mining PLC Monday said it has agreed a short-term financing loan of up to USD4 million from major shareholder China Sonangol International Pte Ltd.
The iron ore producer and mineral developer, which is focused on the Republic of Guinea in West Africa, had said in a statement last week that it had been unable to secure long-term financing but it was in talks with China Sonangol in relation to the provision of a short term loan.
In a statement Monday, Bellzone Mining said China Sonangol has agreed to provide it with up to USD4 million in short-term funding. Chine Sonangol is Bellzone's second-biggest shareholder with a 29.9% stake.
The company said it expects to initially draw down USD750,000, which will provide it with working capital to continue operations until late August.
It said it the remaining USD3.25 million in funds would provide it with enough working capital until late October, although the draw-down is subject to the "satisfaction of certain further conditions".
The company said the conditions include the completion of the transfer of Bellzone Holdings SA - the holder of the Kalia Mining Permit and a wholly-owned Jersey subsidiary of the company - to OTN Mining Ltd, another wholly-owned subsidiary of the company. This change requires governmental approvals.
The company said that it is confident that the conditions will be satisfied, although there can be no guarantee.
The loan is repayable in full on or before December 14.
"The loan enables the company to continue to pursue its discussions with other prospective providers of financing, including for bridge funding, which would enable the company to further progress development work and fund associated working capital while the Kalia project financing is finalised," the company said in a statement.
"There can be no certainty that any such financing will be obtained, nor as to the terms of any such financing, however, the directors continue to work vigorously to secure the funding solutions," it added.
Bellzone Mining shares were trading 3% lower Monday afternoon at 0.800 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Bellzone Mining