LONDON (Alliance News) - Rambler Metals and Mining PLC Wednesday said it has extended its offtake agreement from the Ming copper-gold mine with Transamine Trading SA until 2021 and secured short-term finance from Transamine whilst it sources a longer term solution for its expansion plans.
The copper and gold miner said it has entered into an amended and restated purchase agreement with Transamine, extending its offtake agreement to supply concentrate from the Ming mine in Canada until the end of 2021.
Transamine has agreed to purchase up to USD5.0 million worth of concentrate in advance at Rambler's option. Those advance payments carry an interest rate of LIBOR plus 3.5% per year and will be secured against Rambler's assets.
"This is a significant step forward for the operation and in addition to the more favourable commercial terms negotiated this purchase agreement will allow key construction and development projects to proceed ahead of the main financing, which is expected over the coming months," said President and Chief Executive Norman Williams.
Those advanced payments will be used by Rambler to develop and construct the Lower Footwall Zone at the Ming mine, which it is developing to bring into the existing project and resource.
The first USD2.0 million of advanced payments has already been received in advance of the deal being finalised, and Rambler can opt to receive another USD1.0 million before the end of October.
The remaining USD2.0 million can be drawn down before the end of October also, but only if Rambler agrees a legally binding deal with a financier to secure funds to develop that Lower Footwall Zone and can produce a minimum of 5,000 dry metric tonnes per quarter from the Ming mine, it said.
Rambler will repay the advance payments either on November 1 or within 21 days of securing a financing deal - whichever comes first.
If Rambler fails to repay by the start of November, accrued interest on the outstanding balance will be three month LIBOR plus 7% per annum.
Rambler will not repay those payments by cash, but by reducing the price Transamine pays per dry metric tonne by USD350.
"Rambler has had an excellent relationship with Transamine over the past years, and we are delighted to be aligned with such a great partner as we begin ramping up production for the next era of mining at our Canadian operation," said Williams.
Rambler shares were up 5.6% to 9.24 pence per share on Wednesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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