LONDON (Alliance News) - EMED Mining Public Ltd shares declined on Wednesday after it said it has asked for extension to its loan agreed in December, and asked for further short-term funds under the same loan facility as it continues to try to secure long-term funding from some of its major shareholders.
EMED shares were down 6.7% to 3.50 pence per share on Wednesday morning.
In December, EMED said it had secured a USD30 million unsecured bridging finance facility with Trafigura Beheer BV, Orion Mine Finance, and Hong Kong Xiangguang International Holdings Ltd, an affiliate of Yanggu Xiangguang Copper Co Ltd.
The finance facility was designed to provide EMED with enough working capital to continue with its development of the Rio Tinto copper project to the end of February 2015 whilst it finalised its negotiations with key stakeholders in relation to funding the phase one development plans for the project, which is in southwestern Spain.
As part of the loan agreement, EMED said it had also agreed with Orion and XGC that, conditional on draw down of the initial instalment of the loan, the maturity date of the secured convertible loan notes issued in July 2013 would be extended to be consistent with the date for repayment of the loan.
On Wednesday, EMED said a total of USD24 million has been drawn-down from the USD30 million facility, adding that under the terms of the loan, the repayment date and therefore the maturity date for the convertible notes pursuant to the note extension, is on Monday next week.
The company said it is in talks about extending the loan repayment and the maturity of the notes and EMED has also asked for the additional USD6 million currently available under the loan facility to be made available to the company to give it working capital until mid-April, it said in a statement.
EMED is continuing discussions with its three largest shareholders, Trafigura, Orion and XGC about a longer-term financing solution for the Rio Tinto project.
"Our ongoing discussions are aimed at ensuring the best outcome for all of our investors as we focus on developing the project to our anticipated timetable. With onsite developments progressing and cost savings identified we remain positive about the future and will provide a further update on our financing situation shortly," said Chief Executive Alberto Lavandeira.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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