Sandfire dents debt
PERTH (miningweekly.com) – Copper/gold miner Sandfire Resources has reduced the outstanding balance of debt against its DeGrussa project to A$170-million, following a A$20-million debt repayment at the end of April.
The miner said on Wednesday that the debt repayment reflected the strengthen of the operating cash flow being generated by the DeGrussa mine, in Western Australia, and the robustness of Sandfire’s business.
A total of A$210-million has now been repaid against the original A$380-million DeGrussa project finance facility, with A$115-million of this repaid during the 2014 financial year.
A further A$10-million would be repaid by the end of June, reducing outstanding debt to A$160-million.
Sandfire MD Karl Simich on Wednesday said that the company had simplified its banking arrangements, moving from a syndicate to a single funding bank. The company has now reached an agreement with ANZ Banking Corporation to become its sole financier, replacing the previous syndicate.
He pointed out that the new banking arrangements were better aligned with Sandfire’s current debt levels and cash flow requirements.
The company has also secured a new A$50-million working capital facility with ANZ, which can be drawn down against the value of saleable copper concentrate inventories held at the DeGrussa mine site, and at ports.
The new facility was aimed at reducing the potential cash flow impact of timing of concentrate shipments, and cash receipts.
“Sandfire has now well and truly achieved its objective of reducing its gearing as quickly as possible and, with the DeGrussa operation running at steady-state levels, we have moved into a new phase of our life as a listed company, where we have significant discretion on how to deploy our surplus cash,” Simich said.
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