24 June
2019
Tri-Star Resources
plc
("Tri-Star" or the "Company")
SPMP Operational
Update
Tri-Star Resources plc (AIM: TSTR), the minerals processing
company, is pleased to announce an update on the operations of
Strategic & Precious Metals Processing LLC (“SPMP”), owner of
an antimony-gold processing facility in the Port of Sohar Free Zone, located in the Sultanate of
Oman. Tri-Star has a 40% shareholding in the Project with the
other joint venture partners being The Oman Investment Fund (“OIF”)
(40% equity holder) and DNR Industries Limited, part of Dutco Group
in Dubai (20% equity
holder).
Processing
The SPMP plant is the largest antimony roaster outside of
China and the world’s first ‘Clean
Plant’, designed to EU environmental standards. It has a targeted
capacity to produce in excess of 50,000 oz. of gold and 20,000
tonnes in combined antimony metal and antimony trioxide (“ATO”) per
annum.
The remedial works to resolve the technical issues announced on
18 February 2019 are largely
completed, in particular, the installation of a new gas cooling
solution and modifications to the electric furnace have been
successfully tested with a variety of calcine inputs. SPMP now
expects to be able to move to the production phase of processing
antimony and gold dore.
Accordingly, the Company looks forward to making further
announcements in this regard over the coming months as ramp up
commences. It should be noted, however, that similar to all
complicated engineering processes, there may be unforeseen issues
that will need to be solved.
Feedstock supply
Discussions are progressing in relation to the supply of the
appropriate range and volumes of concentrate available to SPMP.
The Company has had discussions with a range of third
parties and is confident on sourcing all materials necessary to
facilitate targeted production levels.
Offtake agreements
As the facility approaches production, SPMP is committing
additional resources to progressing offtake agreements with a
number of potential customers internationally. The SPMP Board does
not expect securing such offtake agreements to be problematic once
the plant nears commercial production.
Financing
As previously announced, the delay of over a year in
commencing metal production together with the cost of remedial
works, has increased SPMP’s funding requirements. Accordingly,
SPMP has appointed Hannam &
Partners (“H&P) to secure further debt funding for
SPMP. It is considered by the SPMP board that the most likely
funding sources will be the regional banks and specialist debt
investors. It is not expected that Tri-Star will
participate in the debt fund raising.
It remains the intention, as noted in the announcement dated
20 March 2019, that approximately
US$52 million of SPMP’s 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 with the
balance of approximately US$15
million remaining on existing terms. This is in
addition to the $35m of shareholder
Mezzanine Loans from OIF and DNR agreed in March. SPMP and Tristar
continue to investigate how best to structure the conversion for
the benefit of all stakeholders.
The SPMP shareholders remain committed to exploring seeking a
listing of SPMP at the appropriate time following the move to
commercial production and further updates on this will be made in
due course.
Management
Following the changes in the Tri-Star management announced in
April 2019, the Board has commenced
the search for an industry expert to assist in further solidifying
the relationships of all three major equity holders in SPMP.
Further announcements will be made as and when such an individual
has been appointed.
Costs
The Company remains conscious of costs and recent changes to the
management team have reduced these significantly. Cost
cutting is on-going with one of the Board’s main targets being to
keep the overhead to a minimum, commensurate with the Company’s
status as a holding company with a single minority
investment.
Whilst there are a number of challenges ahead, the Board
believes that SPMP’s long term prospects remain good
with SPMP management identifying a number of
opportunities to drive performance once commercial production has
been achieved.
Adrian
Collins, Chairman of Tri-Star commented:
“The successful plant modifications are highly encouraging with
SPMP now able to focus on production of metal, ramp up and
concluding appropriate supply and offtake agreements. Now
that the production phase is nearing, we intend to move to a
quarterly reporting schedule in order to provide a regular news
flow to investors.”
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.
**ENDS**
For further information please visit www.tri-starresources.com
or contact:
Tri-Star Resources plc
David Facey, CEO/ CFO
Tel: +44 (0)20 7920
3150
Tavistock Communications Ltd
Tel: +44 (0) 20 7920 3150
Charles Vivian
Mobile: +44
(0) 7977297903
Gareth
Tredway
Mobile: +44 (0) 7785974264
SP Angel Corporate Finance (Nominated Adviser)
Robert Wooldridge/Jeff
Keating
Tel: +44 (0)20 3470 0470
finnCap Ltd (Broker)
Scott Mathieson/Camille Gochez
Tel: +44 (0)20 7220 0500
Notes to Editors:
Tri-Star’s principal interest is in an antimony and gold
production facility (the “SPMP 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 are held for their potential
contribution of feedstock to the SPMP Project.