ERA draws down funding as it flags entitlement offer
PERTH (miningweekly.com) – ASX-listed Energy Resources of Australia (ERA) will draw down the full A$100-million from the revised credit facility agreed with mining major Rio Tinto last year, to provide the company with additional liquidity while it progresses the rehabilitation of the Ranger uranium project, in the Northern Territory.
The two companies last year entered into an amended A$100-million loan agreement, which ERA said at the time would provide the company with additional time to negotiate and implement a future funding solution and offer additional assurance to the company’s stakeholders that rehabilitation of the Ranger Project Area would continue to be funded.
ERA last year revealed that it would require a further A$1.06-billion to A$1.65-billion in capital expenditure to complete rehabilitation of the uranium project, after an independent review of the rehabilitation estimated a cost of between A$1.6-billion and A$2.2-billion for the project, compared with the 2019 cost estimates of A$973-million, while pushing back the completion of rehabilitation work to between the fourth quarter of 2027 and the fourth quarter of 2028.
ERA in February said that work had progressed on an interim funding solution, including a possible interim entitlement offer. The company on Monday told shareholders that it had determined that the interim entitlement offer was the only feasible option available for ERA, and the company was now having discussions with shareholders and was in the process of finalising the terms of the offer, including size and price.
ERA will repay the revised credit facility from Rio with the proceeds from the interim entitlement offer.
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