As a result of the project completion, the facility’s interest rate will reduce from JIBAR + 490 bps per year to JIBAR + 340 bps per year. In addition, the guarantee provided by the holding company to its subsidiary will lapse.
The achievement of this milestone proves Tharisa Minerals' business model to economically mine at the required run rate of at least 400 000 tpm, the technical ability of the plants to process the material at the nameplate capacity of 400 000 tpm and to produce platinum group metals and chrome concentrate to specification.
The facility, which was raised to fund the expansion of Tharisa Minerals’ mining footprint and for the construction of the Voyager Plant, was raised in February 2012 and was utilised in full.
Tharisa Minerals secured a $123 million syndicated senior secured debt financing facility for the expansion of its PGM and chrome mine and processing operation on the south-western limb of the Bushveld Complex, some 45 km from Rustenburg in South Africa’s North West Province.
Tharisa Minerals said that on 30 September 2016, the balance outstanding on the facility was R502.2 million ($36.5 million) -- with a final scheduled repayment date of 31 March 2019. The group holds a cash amount of R135.3 million ($9.8 million) as a debt service reserve account, resulting in a net amount of R366.9 million ($26.7 million) owing on the facility at 30 September 2016.
The loan was provided by HSBC Bank Johannesburg Branch, Nedbank Corporate and Investment Banking and Absa Bank. The group targets a debt to equity ratio of 15% and as at 30 September 2016, the total debt to equity ratio was approximately 17.5%.
“While commodity prices have recorded a recovery from recent lows, the commodity markets remain volatile and to further de-risk the business the group will continue to reduce its debt levels.
“I would like to give recognition to the teamwork that ensured the successful conclusion of the project completion tests and to thank the management of Tharisa Minerals for achieving this milestone,” said Tharisa Minerals CFO Michael Jones.