Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Aim-listed Gemfields has inked a $15-million unsecured, 12-month working capital facility with specialist natural resources investment company and key shareholder Pallinghurst Resources, the funds of which will be used to “smooth" the company's centrally available cash flow.
This came as the company noted the intermittent nature of revenues from its gemstone auctions as well as the need for capital for the ongoing development of its ruby, rough gemstone trading and Fabergé businesses.
The facility was available in two separate tranches, the first of which was worth $10-million and was available to be drawn between April 17 and November 30.
The second tranche of $5-million was available to be drawn between July 15 and November 30, with both tranches repayable, together with the accrued interest, on April 30, 2015.
The facility had a three-month dollar London Interbank Offered Rate interest rate of plus 4% a year, an arrangement fee of 2%, no commitment fee and was unsecured.
“We are pleased to have agreed this financing facility with our key shareholder, Pallinghurst. We have been interested in securing a working capital facility for some time now and, having considered a number of offers from various banks, we have now secured what we believe to be the most appropriate funding option for the company,” said Gemfields CEO Ian Harebottle.
On December 31, Gemfields had cash in hand of $14.8-million, with a February auction of predominantly higher-quality emeralds achieving record revenues of $36.5-million.
The company had two further auctions scheduled for the current financial year, which ended on June 30, the first of which was an auction of traded rough emeralds, sourced from the open market, in Jaipur, India, in April, and the second the inaugural auction of rough rubies from the Montepuez ruby deposit, in Mozambique, which was scheduled for June.
“We look forward to the inaugural auction in June of rough rubies from the Montepuez ruby deposit, the development of which has been funded entirely by Gemfields from internal resources,” noted Harebottle.
“It remains a very exciting stage in Gemfields' development. While we have two further auctions scheduled for this financial year and prevailing market indicators remain robust, we have already beaten Gemfields' best-ever revenue year, given that year-to-date auction revenues stand at $92.9-million, with total sales from rough emerald and beryl having reached $96.4-million.”