Base defers first payment on debt facility
JOHANNESBURG (miningweekly.com) – Base Resources has deferred the first payment of a $215-million debt facility after a delay in starting up sales from the $310-million Kwale project, in Kenya.
The dual-listed mineral sands miner explained that the first repayment, which was deferred from December 2014 to June 2015, was initially negotiated in 2011 on the premise that sales from the mineral sands project would start in October 2013.
However, the Kwale mine only started producing heavy mineral concentrate that month, followed by the output of first ilmenite and rutile finished products in December 2013.
Zircon production started in February this year, as the first bulk shipment of 20 000 t of ilmenite was exported.
Bulk rutile and containerised zircon sales started in April.
The debt restructure deal also saw a “reprofiling” of debt repayments to decrease the initial repayments, with repayments during the 2015 financial year reduced from $45.9-million to $11-million.
“Under the approved terms of the restructure, all principal repayments and funding of the debt service reserve account will be deferred by six months with some reprofiling to suit future cash flows,” the company noted in a statement.
Following the implementation of the restructured debt facility within the next two months, Base was expected to be in a “sound position” to complete the ramp-up and optimisation of the Kwale project.
The Kwale project, which achieved a maiden cash flow-positive quarter in June, would produce 4.7-million tons of final product over a 13-year life-of-mine.
The finalisation of the restructure remained subject to the agreement and execution of final documentation.
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