(ShareCast News) - TomCo provided an update on the proposed palm oil milling operation in the Makeni oil palm belt in Sierra Leone on Friday.The AIM-traded firm said that, following completion of the equity fundraise announced on 2 September, discussions have been ongoing with potential debt providers with regards to securing a debt facility to part fund and enable the company to commence procurement and construction of the initial one tonne per hour processing plant."Whilst discussions remain ongoing, the company has been considering the optimum development plan for the project, given it is the board's intention to seek to fund the majority of the project's capital expenditure from such debt financing," its board said in a statement.As a result, TomCo is now considering proceeding directly to developing the 2tph palm oil production plant and associated packaging plant, with an expected aggregate capital cost of approximately $1.25m, rather than a phased ramp up from 1tph to 2tph."On securing the necessary debt funding, the company anticipates that it will take approximately six to nine months to commence commercial operations."The company proposes that the soap making plant will be brought on stream at a later date, with the estimated cost of $275,000 being funded from the anticipated early cash flow from the project."TomCo said it has also decided to proceed with purchasing the boiler unit for the 2 tph plant at a cost of $27,500 from its engineering partner in India."This is largely due to the boiler being a long lead item, which takes approximately four months to construct."This shall be funded from the company's available cash reserves, which as at 3 October, was approximately £375,000."Progress is also being made at the Makarie site despite the waterlogged nature of the ground following Sierra Leone's rainy season, the company reported.Drainage ditches are currently being dug in order redirect any further water runoff from the main access road away from the site allowing work to recommence on clearing the site trees later this month."Other items of equipment and management personnel have already been sourced locally in Sierra Leone and site works will begin in earnest as soon as financing has been obtained."TomCo said it has also held preliminary discussions with regards to a potential offshore offtake agreement, pursuant to which the company would seek to sell palm oil to the offtake partner at the factory gate for overseas exports."I'm delighted to see the progress being made regarding our palm oil project as we consider moving straight to the larger scale production plant which will result in an increased return on our investment. We look forward to updating the market going forward," said chairman Andrew Jones.
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