RE: Recent RNS is very clear - part 1 (CAPITAL LETTERS)21 Dec 2023 06:49
Part 2 - the market will eventually wake up….
LINE 1 OPERATIONAL & FINANCING UPDATE
As announced on 14 November 2023, the Company reduced construction activities at Araguaia, progressing only critical work streams in order to manage the Company’s liquidity, whilst continuing discussions with the Company’s cornerstone shareholders and senior lenders. Based on the cash preservation measures undertaken to date, and ongoing conversations with suppliers, the Company now estimates to have sufficient working capital until the end of January 2024. If successful, the discussions with the cornerstone shareholders and senior lenders should avail further interim funding to extend this period.
As of 15 December 2023, the Group had a cash position of US$42 million, of which US$19 million is held in secured accounts relating to Araguaia’s project financing and US$16 million is segregated for the development of Vermelho, with the balance of US$7 million spread amongst other entities for the ongoing running of the Group.
The Company’s cornerstone shareholders and senior lenders are CONTINUING to undertake their respective due diligence as part of a FULL funding solution, which includes WORKING with the Company and independent consultants who are UNDERTAKING a review of the outstanding Project capital expenditure and schedule. It is EXPECTED that this due diligence process and independent review will be finalised in Q1 2024, with a full funding solution TARGETED for early Q2 2024.
During this slowdown period, the Company continues to advance construction of two workstreams, the Water Storage Reservoir and the 230kV powerline, both critical components of Rotary Kiln Electric Furnace (RKEF) operations, while maintaining a strong focus on safety and cash preservation measures.
In conjunction with the above, the Company continues to be focussed on MINIMISING the impacts of the deceleration and demobilization of construction activities on site, as well as taking the necessary actions to secure a safe and sustainable resumption of construction activities following the slow down.
LINE 2 FEASIBILITY STUDY
Due to the ongoing review of the outstanding Project capital expenditure and schedule for Araguaia Line 1, the Line 2 Feasibility Study has been placed on hold given the intrinsic relationship between Araguaia Line 1 and Line 2.
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