16th Nov 2015 11:54
LONDON (Alliance News) - China Africa Resources PLC on Monday said it has borrowed USD200,000 from a subsidiary of East China Mineral Exploration and Development Bureau for Non Ferrous Metals, the majority shareholder in the company, with the money to be used for general working capital purposes.
The loan agreement with Hong Kong East China Non-Ferrous Resources Co Ltd allowed China Africa Resources to draw down the USD200,000 immediately. Hong Kong East China Non-Ferrous Resources owns 65% of China Africa Resources. Weatherly International PLC, an AIM-listed mining, development and exploration company focused on copper in Namibia, also owns a 25% stake.
The unsecured loan is to be repaid on June 30, 2016, and carries interest at the one-year US dollar London interbank offered rate.
China Africa Resources said it has about USD700,000 in cash reserves following draw-down of the loan.
"The company continues to review the funding options for its Berg Aukas project and is managing its cash reserves and costs in the interim," China Africa Resources said. The Berg Aukas project is a high-grade zinc, lead, silver and vanadium deposit in Northern Namibia in Southern Africa.
China Africa Resources said its independent directors, being James Richards, Frank Lewis, Rod Webster and John Bryant, consider the terms of the loan to be fair and reasonable to the company's other shareholders, as the loan is considered a related party transaction because Hong Kong East China Non-Ferrous Resources is the majority shareholder in the company. The directors consulted China Africa Resources' nominated adviser, RFC Ambrian, to come to that conclusion.
Meanwhile, the company said that Jingbin Tian has resigned as a non-executive director with immediate effect.
"Jingbin Tian was appointed as a director in conjunction with the investment of HK ECE and the company would like to thank him for his contribution as a director since then," China Africa Resources said.
Shares in China Africa Resources were down 26% at 3.50 pence on Monday late morning.
By Samuel Agini; [email protected]; @samuelagini
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