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Western Areas debt free as it retires convertible bonds

3rd July 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Nickel miner Western Areas has become debt free for the first time since 2004, after repaying some A$125-million of convertible bonds from existing cash reserves.

MD Dan Lougher told shareholders on Friday that the repayment of the final convertible bonds on their maturity was an important milestone for the company.

“Western Areas continues to execute a disciplined capital management plan and the retirement of the final convertible bonds was a key objective, which adds further strength and flexibility to the Western Areas balance sheet.”

Lougher noted that the company’s interest and financing charges would reduce by about A$12.5-million in the 2016 financial year, which would have a positive impact on Western Areas’ earnings going forward.

“With the elimination of debt, the company can direct the savings towards shareholder return and our organic growth opportunities at Forrestania and Cosmos, in Western Australia, and the Western Gawler in South Australia,” Lougher added.

Western Areas had in place a fully undrawn finance facility of some A$125-million, which also provided balance sheet flexibility.

The nickel miner last month spent A$24.5-million to acquire the Cosmos nickel complex, in Western Australia, from diversified miner Glencore. The project covers some 88 km2 in the Agnew Wiluna nickel belt, and had a historic production of 127 000 t of nickel, at an average grade of 5%.

Western Areas was hoping to develop a third underground mine at the Odysseus high-grade deposit, which hosts a mineral resource of 7.3-million tonnes, grading 2.4% nickel and containing some 174 000 t of nickel.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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