Resolute cuts back on debt
PERTH (miningweekly.com) – Gold miner Resolute Mining would accelerate the repayment of its A$15-million convertible notes currently on issue, as the company’s cash flow benefited from strong operating performances and a reduction in costs.
The notes represented Resolute’s most expensive debt and were no longer considered necessary to support liquidity.
The unsecured notes were issued in December 2014 at an issue price of A$1 each to raise gross proceeds of A$15-million, and were listed on the ASX. The notes had a three-year term and a 10% coupon.
The trust deed governing the convertible notes allowed for Resolute to elect an early redemption of the notes from December 2016 onwards. To redeem the notes prior to this date, the company would seek an amendment to the trust deed to change the early redemption date to June this year.
Resolute MD and CEO John Welborn said that the early redemption of the notes would save the company some A$2.2-million in future interest charges.
“Resolute is changing to become a company that is totally committed to our shareholders. Strengthening the balance sheet by debt reduction has been a priority as we prepare for investments in growth,” Welborn said.
He noted that in this context, Resolute’s operating performances at the Syama and Ravenswood mines, to allow for a rapid debt reduction programme, were pleasing.
“Our ambition is that at the end of June, Resolute will have strong cash and bullion reserves and total borrowings of less than A$30-million represented by unsecured subsidiary level debt.”
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