The following amendment has been made to the ‘Update
on SPMP’ announcement released on 3
January 2020 at 07.00am under
release reference number PRNUK-0301200654-C8D6.
The previous version of the
announcement incorrectly stated that "SPMP is currently in
technical default of its current banking facility arrangements with
Bank Nizwa and Al Aziz Bank as the
most recent repayment obligation has not, as yet, been
met." and “As part of the current SPMP facility arrangements,
on 15 March 2018 each shareholder in
SPMP entered into a conditional completion guarantee (the
“Guarantee”) in favour of Bank Nizwa and Al
Aziz Bank.” The names of the banks are in fact ‘Bank Nizwa
SAOG’ and ‘Alizz Islamic Bank SAOG’.
These sentences should have read "SPMP
is currently in technical default of its current banking facility
arrangements with Bank Nizwa SAOG and Alizz Islamic Bank SAOG as
the most recent repayment obligation has not, as yet, been met."
and “As part of the current SPMP facility arrangements, on
15 March 2018 each shareholder in
SPMP entered into a conditional completion guarantee (the
“Guarantee”) in favour of Bank Nizwa SAOG and Alizz Islamic Bank
SAOG.”
All other details remain unchanged,
and the full amended text of the announcement is set out below.
Tri-Star Resources PLC / AIM: TSTR /
Sector: Natural Resource
3 January 2020
Tri-Star Resources
plc ("Tri-Star" or the "Company")
Update on SPMP
Tri-Star Resources plc (AIM: TSTR), the minerals processing
company, announces an update on its investment in Strategic
& Precious Metals Processing LLC (“SPMP”) an antimony and gold
production facility in the Sultanate of Oman in which the Company holds a 40% equity
interest. The other joint venture partners are The Oman Investment
Fund (40% equity holder) and DNR Industries Limited, part of Dutco
Group in Dubai (20% equity
holder).
Funding of Tri-Star
As previously announced, SPMP has been in the process of seeking
further financing in order to ramp up operations at its antimony
and gold production facility in Oman, targeting 100% capacity by the end of
2020 and securing its long- term operation. The board of SPMP
has determined that in order to reach 100% capacity and sustainable
positive cash flow, SPMP will eventually require up to USD160 million of additional finance, including a
working capital facility of USD60
million to fund a build-up in inventories, a normal creditor
and debtor cycle, the continued investment in the plant and to meet
current debt obligations.
SPMP has considered several different combinations and types of
finance including debt, mezzanine and equity funding and although
negotiations with various potential providers of finance continue,
the terms offered to date are, in the view of the board of
Tri-Star, unacceptable. It is also the board of Tri-Star’s
view that any such provider of further finance to SPMP will require
comfort that the total funding required of up to USD160 million is available prior to confirming
its individual commitment to the funding package.
Accordingly, whilst negotiations are ongoing, there is
uncertainty as to whether SPMP will be able to achieve the
financing it requires on a timely basis and, if it is able to
secure such financing, the terms on which it would be made
available. As a result, the long term future of SPMP will
remain uncertain until any such financing is secured.
Negotiations between the shareholders of SPMP continue as to how
to provide short term financing to SPMP in order for it to continue
its operations. No agreement has yet been reached.
However, the various outcomes might include the dilution of
Tri-Star’s share-holding in SPMP (as a result of the financial
contributions of other shareholders) and the temporary suspension
of operations at SPMP.
Tri-Star will update the market as negotiations progress.
SPMP’s bank loans
SPMP is currently in technical default of its current banking
facility arrangements with Bank Nizwa SAOG and Alizz Islamic Bank
SAOG as the most recent repayment obligation has not, as yet, been
met. The short term funding arrangements referred to above
are intended to remedy this default.
As part of the current SPMP facility arrangements, on
15 March 2018 each shareholder in
SPMP entered into a conditional completion guarantee (the
“Guarantee”) in favour of Bank Nizwa SAOG and Alizz Islamic Bank
SAOG. Tri-Star’s obligation under the Guarantee amounts to 40% of
SPMP’s liabilities outstanding to these two banks, which currently
stands at approximately USD30 million
(out of a total owed of approximately USD75
million). Tri-Star’s obligations under the
Guarantee fall away once commercial production of SPMP’s facility
in Oman has been achieved. The
board of Tri-Star believes this now to be the position as it has
been informed by SPMP that commercial grade antimony has been
produced (as announced on 18 November
2019) and commercial grade gold dore has been produced and
sold. The Guarantee will be formally discharged once an
independent consultant certifies to the banks that commercial
production has been successfully started.
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 |
c/o SBP
Tel: +44 (0)20 7236 1177 |
St Brides Partners
(Financial PR)
Isabel de Salis / Beth Melluish |
Tel: +44 (0)20 7236 1177 |
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.