Tri-Star Resources Plc SPMP Operational Update

 
TIDMTSTR 
 
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. 
 
 
 
END
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