PERTH (miningweekly.com) – ASX-listed Gulf Manganese Corporation has secured a €52-million structured loan facility from Glacier International Depository, Legal and General Investment Management, and HSBC Bank, to complete the construction of its Kupang smelting hub, in Indonesia.
Gulf on Wednesday told shareholders that the company would now be fully funded to complete the construction and commissioning of the first two smelting furnaces at Kupang, with construction to restart immediately.
The first two smelters would be completed, and would pour their first metal in the third quarter of this year.
The Kupang smelting hub will contain at least eight furnaces built in stages over a five-year period. At full production, the first two furnaces will produce some 320 000 t/y of manganese ore to deliver some 155 000 t/y of premium-quality ferromanganese alloy.
“We are delighted to have finally secured this facility and I can confidently reassure shareholders that we now have a clear line of sight on the pouring of first metal at Kupang,” said Gulf MD Hamish Bohannan.
“With $13-million required to complete the construction and commissioning of our first two smelters, we now have ample capacity to fast-track high-impact mining and exploration programmes targeting Indonesia’s abundance of high-grade manganese ore deposits.”
The loan will have a term of two years and an interest rate of 14.5% a year, and will be repayable in full in a lump sum at the end of the loan term. Gulf will be required the pre-pay one year’s interest on the loan at the start of the loan period.
In addition, a loan restructuring fee of 4% plus third-party underwriting and associated transaction costs will result in Gulf receiving an amount of €40-million.
In addition to funding the construction of Kupang, the loan facility also provides Gulf with the ability to ramp up its high-grade manganese mining and exploration activities in Indonesia, taking advantage of its licence to export manganese concentrate, and to advance its strategic joint venture with Iron Fortune in Timor Leste.