Sumatra Copper seeks $21m loan for Tembang project
Thursday, July 3 2014 - 02:50 AM WIB
ASX-listed Sumatra Copper & Gold Limited announced Thursday it is in the process of seeking credit committee approval with an internationally recognized bank for approximately US$21 million of senior secured debt facilities with a $2.5 million cost overrun facility as part of funding plans for its Tembang gold project located in southern Sumatra, Indonesia.
The company said in a statement that it has completed the necessary independent technical export report.
It added facility would require mandatory hedge cover equivalent to 50 percent of gold and 80 percent of silver production over an anticipated 4.5 years loan life.
?Provision of the facility will be subject to bank credit committee approval, completion of project finance documentation, equity funding and conditions precedent typical for such a financing. Interest rates and other commercial terms are expected to be standard for a project financing of this nature,? the statement said.
The total funding package for the development of the project is US$45 million of which $21 million is expected to be funded with the facility and $24 million is expected to be funded with equity, the company explained.
The project cost to complete component as announced in the DFS Study has increased to $35.8 million, reflecting a $2.2million increase in contingency, it added.
In addition to this increase in contingency the funding requirement includes an equity contribution to the cost overrun facility, corporate and exploration costs during construction and financing and interest costs during construction.
Elsewhere, Sumatra Copper said it is also seeking credit approval for a VAT finance facility of approximately Rp 50 billion from an Indonesia based bank.
?Sumatra anticipates that credit committee approval for debt facilities and the equity raise to complete Project funding will occur in July 2014,? it said. To facilitate the equity raising the company will hold an Extraordinary General Meeting in late July 2014 to seek shareholder approval for the placement of A$27 million in equity.
The company also advised that it has signed a variation of the Convertible Loan Facility Agreement dated 4 December 2013 with major shareholder Provident Minerals Pte Ltd to increase the facility by US$500,000 to $5,100,000. The additional $500,000 has been fully drawn for the purpose of providing the company with working capital through to the anticipated funding of the TembangProject.
Editing by Reiner Simanjuntak