Certain
information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of Regulation (EU)
No. 596/2014 until the release of this announcement
Tri-Star Resources
plc
("Tri-Star" or the "Company")
SPMP Funding and
Operational Update
20 March 2019
Tri-Star (AIM: TSTR), the mining and minerals processing
company, is pleased to announce an update on the funding structure
and operations of Strategic & Precious Metals Processing LLC
("SPMP"), owner of an antimony-gold processing facility in
Oman in which the Company has a
40%-shareholding.
Following discussions between the shareholders in the project, a
significant funding solution has been agreed primarily to cover
short term working capital and capital expenditure requirements as
the SPMP facility nears first revenue and a longer-term financing
solution is finalised. As part of this agreement, Tri-Star will
maintain its 40% shareholding in SPMP and is not required to inject
any new funds into the project.
In addition, the shareholders of SPMP have agreed to explore a
stock exchange listing of SPMP and a full range of liquidity and
funding options.
Funding update
Under the agreement entered into between SPMP and Tri-Star
together with the Oman Investment Fund Holding Company LLC (“OIF”)
and DNR Industries Ltd (“DNR”), 40% and 20% shareholders in SPMP
respectively (the “Agreement”), OIF and DNR have agreed to provide
funding to SPMP in the form of a new mezzanine loan (the “New
Mezzanine Loan”) of US$35 million on
terms substantially similar to SPMP’s existing Mezzanine Loan with
the following principal exceptions:
- the New Mezzanine Loan will be repaid in priority to the
existing Mezzanine Loan and any other unsecured indebtedness;
- the New Mezzanine Loan will not be convertible into equity of
SPMP;
- SPMP may pre-pay all or any of the New Mezzanine Loans at any
time without penalty;
- the New Mezzanine Loan will bear interest at 20% per annum,
payable semi-annually; and
- Tri-Star has the option but not the obligation to participate
in the New Mezzanine Loan up to its 40% pro rata interest.
No new equity will be issued as part of the New Mezzanine Loan
arrangements and the shareholders’ equity interests in SPMP will
remain OIF 40%, Tri-Star 40% and DNR 20%.
As part of the Agreement, it is intended that approximately
US$52 million of the existing
Mezzanine Loan (including accrued interest) will be converted into
an interest free shareholder loan and/or equity on a pro-rata basis
to OIF’s, Tri-Star’s and DNR’s current shareholdings. The
US$15 million balance of the existing
Mezzanine Loan will remain on existing terms.
Under the Agreement, OIF, Tri-Star and DNR have agreed to
explore seeking a listing of SPMP, provisionally to take place once
commercial production has been achieved. Further updates on this
will be made in due course. SPMP is also in discussions with
various banks on refinancing options for the SPMP project.
Karen O’Mahony, Acting Chief Executive
Officer of Tri-Star, commented:
“I am pleased to announce this
positive financial restructuring. The SPMP shareholders have been
working hard to achieve a funding solution that not only meets the
short-term financial requirements highlighted in our announcement
of 14 January 2019, but also confirms
to external funding institutions the shareholders’ commitment to
this world-class, technologically-advanced project.
Once again, I’d like to thank the
government of Oman for its
continued support as we get nearer to the point of adding a
significant industrial asset to the country’s economy.
The prospective listing of SPMP in
its entirety has always made sense. SPMP will now be appointing
independent advisors to look at listing feasibility, together with
the optimal structure and timing for the company and its
shareholders.
Meanwhile, on the ground, the management team continues to
work to solve the issues that are holding back first production at
the plant to ensure that it takes its place as a globally
significant beneficiation facility for years to
come.”
Operational Update
Unrefined antimony metal has been produced from intermediate
products (crude antimony trioxide and impure antimony trioxide) in
the pilot furnace which is proof of the process chemistry. It was
noted that the chemical composition of the antimony metal had a
97.3% purity in its unrefined form. However, as previously
disclosed, SPMP continue to have teething problems with the plant -
this is not unusual as production ramp up generally presents some
issues.
Steven
Din, CEO of SPMP, commented:
“During the commissioning of the
antimony production plant in Sohar, several engineering design
issues have been identified. SPMP is working with the project
manager, Worley Parsons, to
remediate these.
I am confident that this is a unique
processing facility that will command a dominant position on the
global stage for antimony production.”
ENDS
Enquiries:
Tri-Star Resources plc
Karen O’Mahony, Acting CEO/
CFO
Tel: +44 (0)20 7653 6291
Tavistock Communications Ltd
Charles Vivian/ Gareth
Tredway
Tel +44 (0)20 7920 3150
SP Angel Corporate Finance (Nominated Adviser)
Robert Wooldridge/ Jeff Keating/Caroline
Rowe
Tel: +44 (0)20 3470 0470
FinnCap Ltd (Broker)
Christopher Raggett/Scott Morrison/Camille
Gochez
Tel: +44 (0)20
7220 0500
Notes to the Editor
Tri-Stars principal activities are in an antimony and gold
production facility (the “SPMP Project” or the “Project”). The SPMP
Project is based in Sohar, Sultanate of Oman, and is being developed by Strategic
& Precious Metals Processing LLC (“SPMP”), an Omani company in
which Tri-Star has a 40% equity interest.
Tri-Star also has antimony exploration licenses in Canada which is held for its potential
contribution of feedstock to the SPMP Project.