Indo Mines secures $3.25m funding for Jogjakarta iron sands project

ASX-listed firm Indo Mines Limited announced Wednesday that it has executed a term sheet with Anglo Pacific Group PLC for an A$5 million (US$3.25 million ) financing facility.

The funds from this facility will be used for continuation of Jogjakarta iron sands Feasibility Study works, acquisition of additional iron sands property and securing a coal supply for the project.

The conversion price for the facility is A$0.50 per share and carries a coupon of 8% per annum, payable quarterly in arrears. The coupon is payable via the issue of Indo Mines ordinary shares, based on a 10% discount to the 30 day volume weighted average price, or by cash at the discretion of Indo Mines.

Indo Mines has agreed to grant a 2% net smelter royalty to Anglo Pacific over its attributable portion of the liquid iron or iron sand concentrate sales produced through the Jogjakarta Liquid Iron plant until the facility has been repaid, following which the royalty will reduce to 1%.

The facility has a provision for aUS$325,000 advance, subject to normal commercial conditions, to enable Indo Mines to continue with its Feasibility Study program.

Final drawdown under the facility is subject to a range of conditions precedent including completion of definitive documentation. Documentation is well advanced and is expected to be finalised in Q1 2009.

Indo Mines is developing a US$600 million, 1MTPA liquid iron project at Kulon Progo, Jogjakarta. In September 2006 the Company identified a JORC-compliant mineral resources of 605 million tonnes. The company has 70 percent stake in the project.

Anglo Pacific Group PLC specialises in developing royalty flows through investments in strategic mineral exploration and production opportunities. (denny)