Straits restructures copper swap facility
PERTH (miningweekly.com) – ASX-listed metals miner Straits Resources has restructured its copper swap facility with Standard Chartered Bank (SCB) to secure more attractive repayment terms.
The miner said that under the revised terms, the monthly repayments would be reduced from 450 t to 69.9 t of copper over the next nine months, at the end of which the remaining facility would be restructured over a five-year term, instead of the current three years.
As a condition of the restructure, Straits was required to undertake a resource to reserve upgrade programme to prove-up an additional 50 000 t of certified copper reserves by May next year, as well as to hedge 8 114 t of copper production during the interim restructure period.
In addition, if Straits was to undertake a debt or equity raising during the interim restructure period, half of the net proceeds of the raising would have to be applied to repaying the principal amount under the SCB facility.
“The successful restructuring of the SCB copper swap on more affordable and sustainable terms for the next nine months is significant, in that it provides greater financial certainty as we refocus on ensuring that the Tritton mine performs to its potential, to provide the platform for a more sustainable financial structure for the company going forward,” said Straits executive chairperson Andre Labuschagne.
He noted that locking in a proportion of production through a hedge over the next nine months also provided certainty during this phase, while allowing access to the potential upside over the balance of production.
Labuschagne noted that following the cessation of operations at the Mount Muro project, in August this year, Straits was now focused on its copper assets, including the Tritton mine and the Temora copper/gold deposit.
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