17th Jul 2015 13:41
LONDON (Alliance News) - Tri-Star Resources PLC said it has agreed in principle with its joint venture partners in Oman to revise the capital structure of the holding joint venture company.
Strategic and Precious Metals Processing LLC is the joint venture company between Tri-Star, which holds a 40% stake alongside its partners Oman Investment Fund and DNR Industries Ltd, which was formerly known as Castell Investments Ltd.
The joint venture is developing a 20,000 tonne per year antimony processing facility in Oman as part of the Oman Antimony Roaster project.
The total funding for the Oman Roaster project for Strategic and Precious Metals will remain unchanged at USD70 million, but the composition of that funding will be amended so the funding comprises of less equity and more debt.
Under the amended terms, USD15 million of equity will be provided by the joint venture partners compared to the previous USD20 million and a mezzanine loan facility will total USD15 million rather than the previously stated USD10 million. The USD40 million of senior debt will remain unchanged, said the company.
Under these new terms, Tri-Star's required equity contribution to the joint venture on financial close decreases to USD6 million from USD8 million.
In addition, Tri-Star said it has delivered the two required third party commercial and technical reports in draft form to Strategic and Precious Metals under the deal announced in June, whereby Tri-Star reached a conditional agreement to sell certain intellectual property rights to the company for USD6 million.
Tri-Star said the rights being sold related to its clean antimony roasting and refractory gold clean roasting processes.
However, although the USD6 million fee remains unchanged, the composition of that payment has also been amended.
Previously, Tri-Star was set to get an initial USD2 million payment with a further USD2 million due on the receipt of third-party reports on the commercial and technical viability of the clean roasting processes and another USD2 million on the commissioning of an antimony roasting plant at the project.
On Friday, the company said the first two tranches totalling USD4 million, of which Tri-Star will receive net proceeds of USD2.4 million due to its stake in Strategic and Precious Metals, will be made available to Tri-Star for offset against the company's now reduced equity commitment in the Oman project.
The last tranche of USD2 million will still be payable once the receipt of third-party reports on the commercial and technical viability of the clean roasting processes has been received.
Tri-Star shares were up 2.1% to 0.143 pence per share on Friday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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