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(Alliance News) - Metals Exploration PLC said Tuesday negotiations to restructure its debt continue, and it is seeking an extension to the standstill agreement, which ends this Friday.
Shares in the mineral resources exploration and development company were down 13% Tuesday at 0.59 pence each.
The standstill agreement deadline has already been extended to June 28. The standstill was first signed in April and renewed a first time to the end of May.
The company renewed the agreement with lenders HSBC and BNP Paribas and major shareholders MTL Luxembourg SARL and Runruno Holdings Ltd as holders of its mezzanine debt.
Now, Metals Exploration is seeking a further extension.
Speaking at the company's annual general meeting on Tuesday, Chief Executive Darren Bowden said: "Obviously, we are now only three days away from June 28 which is when the current standstill agreement falls away. Contrary to what has been stated in some recent press articles negotiations to restructure the debt are ongoing and the company is seeking to extend the standstill ensuring time is available to reach a conclusion.
"I appreciate that this has been a very difficult time for you as shareholders of this company. It would be misleading to give you any type of assurance that a new agreement will be reached as we are in the hands of our lenders. What I can say though is that we are trying everything we possibly can in this regard."
Without a standstill, the miner would have to pay USD44.1 million of both principal payments and interest on its senior facility. It currently does not have the funds to make these payments.
"It has been an extremely busy period since we started and while we have already started making improvements, which have borne fruit, we are not in a position to meet the debt repayments and interest that you all know too well. With that, and given the announcements of the last few months, I suspect you may have some questions. I will do my best to answer them but as I'm sure you can understand there may be some that I am unable to provide further colour," added Bowden.
Bowden was hired in January and Chief Financial Officer Michael Langoulant was appointed in February.
The company focuses on its 100%-owned Runruno gold project in the north of the Philippines.
In February, the company reported "several material discrepancies" after an internal review into the historical operational performance of its Runruno mine.
The review, carried out by its new management team, does not impact the gold poured or sold during the period, stressed Metals Exploration. The review was focused on the BIOX circuit throughput at the gold-molybdenum project.
Past statements from the company said the BIOX circuit achieved 100% design throughput for extended periods of 2018. However, after the review - which was also conducted by a third-party consultant - it was realised that the circuit has yet to reach 100% throughput, achieving on average 31% in 2018.
On Tuesday, Bowden offered some optimism: "In essence, the BIOX was not working nearly as well as it should have been. As many of you will know, the BIOX has been somewhat of a headwind for the company in the past and is still yet to be fully resolved, however our new on site team have achieved some impressive results and we at least now fully understand the issues and have options to solve them."
He continued: "I'm pleased to say that our new team has put us in a position where both the mine and the plant performance are improving. We have been able to sustain a 66% overall processing recovery in 2019 against 57% in 2018 and have solutions, that require additional/unfunded capital expenditure, to move to 85% in the medium term."
