Tri-Star Resources PLC / AIM: TSTR /
Sector: Natural Resource
8 April 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 Holding Company LLC (“OIF”) (40% equity holder) and
DNR Industries Limited (“DNR”) (20% equity holder).
Operations
Ramp up of antimony production is continuing at a steady pace
moving towards operating at 50% capacity in the near future
following which, SPMP expects to move to full capacity by the end
of the year, subject to any impact upon operations caused by the
Coronavirus pandemic (see below).
SPMP started producing and selling gold in November
2019.
Financing of SPMP
SPMP has signed a term sheet with local banks to provide a
USD 60m term loan facility. In
addition, the banks have expressed an interest in providing a
working capital facility of up to USD45m (out of a total required of USD 60m as announced on 3
January 2020) subject to meeting certain criteria.
A total of USD40m has been
injected by OIF and DNR into SPMP on terms which have yet to be
agreed between the shareholders.
OIF has issued a Request for Arbitration, commencing an
arbitration proceeding with Tri-Star, DNR and SPMP as Respondents.
OIF seeks declaratory relief, inter alia, that the funds
invested by OIF and DNR in SPMP be considered as equity at a price
to be determined by way of valuation. Under Omani law, a
unanimous resolution of the shareholders is required to increase
the share capital of SPMP. Tri-Star has previously exercised
its right not to adopt such a resolution. Tri-Star’s legal
advice is that OIF’s claim has no merit and is, in fact contrary to
the terms of the Shareholders’ agreement and the provisions of
Omani law in this regard and, accordingly, Tri-Star intends to
vigorously defend this action.
The duration of the arbitration proceedings could be lengthy but
Tri-Star will continue to seek consensus with OIF and DNR as to the
terms upon which their funding has already been provided.
Effect of the Coronavirus pandemic
To date the Coronavirus pandemic has had little impact upon the
operations of SPMP. The situation is changing rapidly,
however, with access to the Freezone due to be restricted. SPMP is
working with the authorities to agree a plan that allows critical
employees to continue working, on a safe basis, to ensure that
production can be maintained.
The Coronavirus pandemic has had a negative impact upon the
antimony market and prices, in particular France and Belgium (the two biggest consumers of antimony
metal outside of China), are in
“lock down”. Nevertheless, this is not expected to have a
significant impact upon the long-term viability of the plant as
prices are expected to recover in the medium term. The
Coronavirus pandemic may have an impact upon supply of feedstock
whilst there are restrictions in movement and mining
activities.
Extension to filing deadline for Final
Results due to the Coronavirus pandemic
Tri-Star also announces that there will be a delay in the
publication of the Company's audited financial results for the year
ended 31 December 2019 ("Final
Results").
At the request of the Company's auditors, Grant Thornton, the Company has requested and
received an extension to its filing deadline for its Final Results
from 30 June 2020 to 30 September 2020. This is in light of the fact
that Grant Thornton are presently
unable to review SPMP’s audit files in Oman due to a firm-wide travel ban as a result
of the Coronavirus pandemic.
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)
Jeff Keating / Caroline Rowe |
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.