11th Jan 2007 07:00
Albidon Limited11 January 2007 Level 1ALBIDON LIMITED 62 Colin St West Perth 6005 Western Australia ARBN 107 288 755 Tel: +61 8 9211 4600 Fax: +61 8 9211 4699 Email:[email protected] ASX Code: ALB AIM Code: ALD ALBIDON MANDATES LENDERS IN US$60M FINANCING FACILITY FOR MUNALI NICKEL PROJECT HIGHLIGHTS • The European Investment Bank ("EIB") and Barclays Capital ("Barclays") have been mandated to act as joint Lead Arrangers in providing finance of up to US$60 million for the Munali Nickel Project ("Munali"). • The financing will provide the remaining funding required for development of Munali, including construction costs, working capital requirements and ensure Albidon retains sufficient funds to continue exploration and business development activities. • The financing is subject to completion of due diligence and detailed documentation which are expected to be finalised before mid 2007. • The financing proposals from EIB and Barclays represent a major vote of confidence in the Munali Project. Munali Nickel Project The Munali Nickel Project (100% Albidon) is located approximately 60 kilometressouth of Zambia's capital city Lusaka. The project area comprises the EnterpriseDeposit and a number of other nickel prospects in the Munali Intrusion, the mostadvanced of which is the Voyager prospect along strike to the north ofEnterprise. A positive Bankable Feasibility Study was completed in July 2006 and site workscommenced in September 2006 following Government approvals. A capital raisingwas completed in October 2006 to provide US$35 million of equity finance for theproject. An offtake agreement was recently signed with the Jinchuan Group andfinal documentation on a funding package of US$20 million in subordinated debtand a US$5 million equity investment by Jinchuan is well advanced. US$60 Million Financing Facility The European Investment Bank and Barclays Capital have been mandated to act asjoint Lead Arrangers to provide a financing facility of up to US$60 million.Together with the recent equity capital raising of US$35 million and US$25million in offtake financing, this facility completes the financing arrangementsrequired for development of Munali. The appointment of EIB and Barclays follows an extensive tender process in whichcompetitive proposals were received from numerous banks. The key features of thefinancing facilities are summarised as follows: • Amount of loan: up to US$60 million; • Loan tenor of seven years; and • Political risk insurance required on only a portion of the facility, with coverage currently being progressed. The funding is subject to completion of due diligence and detaileddocumentation. This process is underway and is expected to be finalised beforemid 2007. European Investment Bank and Barclays Capital EIB is the long-term financing institution of the European Union and hasextensive experience of funding investment projects, including the miningsector, in Africa. This expertise includes current base metal mining andprocessing projects in Zambia and neighbouring countries. The EIB has been animportant supporter of Albidon since 2002, through its investment in the AfricanLion Mining Fund. Barclays Capital, the investment banking division of Barclays Bank PLC, is aleading provider of finance to the mining sector and has a wealth of experiencein financing projects in Africa. The Mining & Metals team at Barclays Capital iscomplemented by one of the strongest Commodities groups in the banking sectorwho will coordinate the risk management of the Munali project. Barclays alsocurrently provides commercial banking services to Albidon in Zambia. Albidon is pleased to have the support of two such distinguished groups and welook forward to extending our existing relationships with EIB and Barclays todevelop Munali for the benefit of all stakeholders. Forward Programme for Munali Following completion of the project financing mandates, the implementation ofMunali will continue to accelerate, with a focus on the following key areas ofactivity: • Site preparation including construction of the camp, mobilisation of the mining fleet, excavation of the boxcut for the decline and construction of access roads. • Completion of the electricity supply contract. • Placing orders for major items of equipment that have long lead times for delivery. Initial concentrate production and subsequent project ramp up is targeted tocommence in mid- 2008. If you have any queries, please contact the Company Secretary, Nicholas Day orManaging Director, Dale Rogers on +61 8 9211 4600 or email [email protected] information may also be viewed on Albidon's website atwww.albidon.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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