Tri-Star Resources Plc SPMP Funding and Operational Update

 
TIDMTSTR 
 
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. 
 
 
 
END
(END) Dow Jones Newswires
March 20, 2019 03:00 ET (07:00 GMT)
Tri-star Resources (LSE:TSTR)
Historical Stock Chart
From May 2024 to Jun 2024