13th Jun 2018 16:55
LONDON (Alliance News) - Russian gold miner Petropavlovsk PLC said Wednesday it has loaned USD30 million to IRC Ltd to help IRC's subsidiary meet the payment due under an Industrial and Commercial Bank of China project loan facility.
Petropavlovsk, which owns 31% of IRC, said the bridge loan facility with an annual interest of 12% is expected to be repaid as soon as the refinancing of the ICBC facility is completed.
The ICBC facility, of which Petropavlovsk is a guarantor, was granted to IRC's unit Kimkano-Sutarsky Mining and Beneficiation Plant LLC and amounts to USD340 million.
The payment due on June 20 amounts to USD35.2 million.
Petropavlovsk said negotiations to refinance the facility were at an "advanced stage" with a "major" Russian bank.
Chief Executive Officer Roman Deniskin said: "We are focused on resolving the situation that we inherited from the previous board regarding IRC by helping IRC to refinance their ICBC loan facility so we can eventually monetize our equity stake in this non-core business."
"In the meantime, as a matter of last-resort, Petropavlovsk is making a short-term bridge loan facility available to IRC so that it can meet its ICBC loan payment obligations on June 20, 2018."
In addition, Petropavlovsk said it entered into four gold sales agreements with Sberbank for a total volume of 96,00 ounces.
"The gold sales agreements are another positive development that provide the Group with optionality to access additional liquidity, if required, over the course of the year as we build a strong platform for long term sustainable growth," Deniskin added.
The company also added that the commissioning process at Petropavlovsk Malomir flotation plant is now under way. The second stage of the flotation plant development is expected to be completed and commissioned in 2019, the miner said.
Shares in Petropavlovsk closed 1.7% lower at 8.24 pence each on Wednesday.
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