Tri-Star Resources PLC Oman Antimony Roaster - Capital Budget Update (8221L)
July 24 2017 - 2:00AM
UK Regulatory
TIDMTSTR
RNS Number : 8221L
Tri-Star Resources PLC
24 July 2017
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
24 July 2017
Tri-Star Resources plc
("Tri-Star" or the "Company")
Oman Antimony Roaster - Capital Budget Update
Tri-Star announces further progress by Strategic & Precious
Metals Processing LLC ("SPMP") in developing the Oman Antimony
Roaster project ("OAR"). The OAR is located in Sohar, Sultanate of
Oman. Tri-Star has a 40% equity interest in SPMP.
Since the Company's update reported in the circular to
shareholders dated 1 June 2017, process test-work has now been
largely concluded, with work now focusing primarily on operational
readiness. Consequential final plant modifications have moved
forecast plant commissioning, as expected, into Q1 2018.
Importantly, SPMP's negotiations with Traxys Europe SA ("Traxys")
were concluded on schedule and, as announced by Tri-Star on 13 June
2017, SPMP has signed a multi-year feedstock supply contract with
Traxys.
Moreover, SPMP has achieved process design freeze for the
overall project which has enabled a more definitive appraisal of
the costs to complete to be undertaken. As such, and further to the
matters described above, SPMP has formally approved an increase in
the capital budget for the construction of OAR to $96.0 million,
plus a contingency that can be approved by the Board of SPMP on a
case by case basis.
The bulk of the increase in the capital budget results from
design changes. Specifically:
- increasing the capability of the plant to accept a wider range
of feedstock such as direct shipping ores, of which there is a
large global network of small scale operators currently poorly
served with sustainable off-taker demand;
- expansion of the downstream gold treatment and associated gas
handling which will allow the OAR to bring in non-conventional feed
sources of high gold content directly for gold recovery, thereby
increasing gold output viability without compromising the antimony
concentrate process route; and
- thirdly, subsequent to test-work, altering the design and
materials for construction of the gold furnaces to protect the
equipment from the highly corrosive behaviour of antimony on
linings, therefore improving plant life, equipment performance and
most importantly the quality of the gold to be produced.
SPMP's existing committed financing facilities amount to $70
million, comprising senior debt of $40 million from Bank Nizwa and
shareholder loans and equity of a further $30 million. As a result
of the now confirmed revised capital budget, SPMP is working
closely with its stakeholders (both prospective lenders and
existing shareholders) to increase the size of these facilities to
accommodate the increased capital cost, the associated contingency,
and SPMP's working capital requirements through to cash flow
positive operations. Tri-Star expects SPMP to be in a position to
start paying dividends to shareholders within three years of
commencement of commercial operations in Q1 2018.
As already advised in the circular to shareholders dated 1 June
2017, the Tri-Star expects to be invited to participate in this
further round of financing in order to maintain its 40% interest in
the project. Further announcements regarding the financing will be
made by the Company in due course.
References in this announcement to $ mean United States
Dollars.
Enquiries:
Tri-Star Resources plc Tel: +44 (0) 20 3470 0470
Guy Eastaugh, Chief Executive Officer
SP Angel Corporate Finance (Nomad and Broker) Tel: +44 (0) 20
3470 0470
Robert Wooldridge / Jeff Keating
Yellow Jersey PR Limited (Media Relations) Tel: +44 (0) 776 932
5254
Felicity Winkles / Joe Burgess
This information is provided by RNS
The company news service from the London Stock Exchange
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