Kingsrose makes significant progress on financial restructuring, new operational strategy
Thursday, February 23 2017 - 01:51 PM WIB
ASX-listed Kingsrose Mining Ltd said on Thursday that significant progress has been made in relation to the company?s financial arrangements and operations at the Way Linggo gold project in Indonesia.
The company?s Administrators, Michael Ryan and Ian Francis of FTI Consulting, have renegotiated the terms of Kingsrose?s secured debt facilities. Kingsrose owes secured lenders Michael John Andrews (MJA), Great Golden Investment Limited (GGIL) and Beaurama Pty Ltd (Beaurama) a total of A$9.6 million comprising outstanding principal and interest. (GGIL and Beaurama are entities controlled by former director Bill Phillips).
Kingsrose said in a statement that these agreements are conditional on the company raising no less than US$4 million through an equity raising or alternative debt arrangements, with at least US$1 million being by way of equity (or a convertible loan) within three months.
The statement said that under the revised agreements, MJA (A$2.25m) and GGIL (A$2.94m) have agreed to convert their debt to equity as part of a broader equity raising. The price at which the debt will convert to equity will be the weighted average price of shares that Kingsrose agrees to issue under the equity raising.
Conversion of the debt to equity is conditional on any necessary shareholder approvals and the simultaneous conversion of any convertible loan forming part of the additional funding, the company said.
Beaurama (A$4.4m) has agreed to release the existing security it has over the shares in the entity which holds Kingsrose?s interest in the Way Linggo Project. It has also agreed that no further interest will accrue in relation to the Beaurama debt until July 2020. From July 2020, Beaurama has agreed to reduce the interest rate from 10.5 percent per annum to 5 percent per annum which Kingsrose will pay monthly in arrears. To the extent it has not been repaid earlier, the Beaurama debt will be deferred to a single payment due on November 30, 2023.
Elsewhere, Kingsrose said consultants, Mining One have reviewed the remnant resource at the original Way Linggo Mine in southern Sumatra. A plan has been developed to recover part of this resource via an open cut mine.
It is proposed that the open pit to exploit this near-surface remnant ore (above Level 1 of the underground workings) will be mined in four phases. Approvals have been obtained to commence work on the first phase, known as the Trench One Pit, immediately.
Kingsrose said the life of mine plan for Talang Santo, also in southern Sumatra is being finalized. While this is being completed, operations at Talang Santo are continuing (albeit at a reduced rate, at least for the short term), producing between 500 ? 800 ounces of gold a month at an average grade of 6.7g/t Au.
At present, it is anticipated that changes to the mine plan and capital infrastructure will allow access to the lower levels of the ore body sooner than originally scheduled. Upon completion of the revised plan, an update to the market will be provided.
Editing by Reiner Simanjuntak