(Alliance News) - Ormonde Mining PLC on Thursday said Saloro SLU has agreed a EUR10 million term loan with Oaktree Capital Management LP-managed funds.
Shares in Ormonde were down 7.1% at 2.60 pence in London shortly before midday.
Ormonde holds a 30% joint venture in Saloro, owner of the Barruecopardo tungsten mine in Spain. The new 12-month term loan will give Saloro more liquidity to establish mining operations in the Barruecopardo main orebody.
Saloro can draw from the new loan in tranches over the loan period. These tranches must be at least EUR500,000. Interest will be paid on all funds drawn and capitalised in full at an 18% per annum rate. There is also a 3% per annum commitment fee which accrues on all amounts undrawn.
The commitment fees, drawn funds, and capitalised interest are all repayable at the end of the 12 month loan term by bullet repayment.
Furthermore, "Saloro has the option to substitute drawings under the funding line with letters of credit procured by Oaktree". This is intended to support Saloro in getting its loan funding from a third party bank instead of from Oaktree directly.
According to Ormonde, "discussions are advancing with a number of third party banks in relation to this lower cost funding route".
In addition, it has been agreed interest on the original Oaktree loan, which has been in place since 2015, will be "accrued in full" at a 15% rate over the term of the new loan.
The original loan interest will then revert to 7% cash and 5% payment in kind once the 12 month period is over if covenant tests are met. If these covenants are not achieved then the loan interest will instead revert to 7% cash and 7% payment in kind.
By Anna Farley; annafarley@alliancenews.com
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