Sherwin faces financing woes
PERTH (miningweekly.com) – Iron-ore junior Sherwin Iron has warned shareholders that it could be facing some funding difficulties, and was seeking alternative sources of funding to meet its ongoing cost demands.
Under Sherwin’s current debt facility, the company would be able to draw down some $10-million in cash, once it had obtained environmental approval for its Sherwin Creek iron-ore project, in the Northern Territory.
However, earlier this month, the federal government requested further information on the project, delaying the federal environmental approval process, as well as the funding draw-down.
Furthermore, Sherwin said it was unlikely that the company’s major shareholders would support a planned A$5-million share purchase plan and rights issue, adding that it was unlikely to raise the full amount unless the company could secure an underwriting commitment.
The low iron-ore price had also prompted Sherwin to delay iron-ore shipments, further impacting on the company’s funding position. Sherwin expected to receive a prepayment for some ore in advance of shipments in late June, which would assist the company in financing its ongoing costs, pending the release of the $10-million debt facility.
Sherwin told shareholders that it remained committed to raising the required funding to meet its ongoing cost, and was exploring a number of funding alternatives that would provide some, or all, of the cash intended to be raised under the share purchase plan and rights offer.
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