PERTH (miningweekly.com) – ASX-listed Flinders Mines has secured a A$5-million loan facility to complete the maturation work at its Pilbara iron-ore project, in Western Australia.
The short-term loan facility can be drawn down in two tranches, with the first A$3-million available immediately, and the remaining tranche available between January and February next year.
“The asset maturation phase is an important step we are undertaking to de-risk the Pilbara iron-ore project and maximise its value ahead of a proposed rights issue next year to progress the development of the project,” Flinders chairperson Neil Warburton said on Monday.
“The board considered a range of funding options to complete the maturation work and decided that an unsecured loan was the optimal approach for the business and all shareholders, given the future funding plans.”
Flinders is hoping to undertake a pro-rata rights issue before the end of the 2018 financial year to repay the loan facility, as well as to progress feasibility and mine scheduling studies, and to supplement working capital requirements.
The loan facility will have an interest rate equivalent to the six-month Bank Bill Swap Rate mid-rate plus 2% a year, with the repayment of the principal outstanding to occur before the end of June next year.