30 Jul 2015 16:00
Ambrian plc
("Ambrian" or the "Company")
Project Update and Related Party Transaction
The board of Ambrian is pleased to confirm that mechanical completion of the Beira cement plant and of the newly-installed electricity substation in Mozambique (together, the "Plant"), in which the Company has an interest through its subsidiary, Cimentos de Beira Limitada ("CdB"), occurred on 29 July 2015. Testing of the electricity substation will now proceed and a timetable will be agreed with the state power utility for connection of the substation to the main grid. This is expected to occur during the first half of August, facilitating hot commissioning of the Plant and commercial production by the end of the month.
As outlined in the Company's admission document dated 17 February 2015, mechanical completion of the Plant was originally scheduled for the end of March and, in accordance with the announcement issued by the Company on 15 May 2015, this timetable was subsequently revised to the end of June. The further delay was attributable to a number of factors, including various issues with contractors, availability of qualified staff and response time from regulatory bodies. As a consequence of these delays and certain cost overruns, the Company now anticipates that cost to completion of the Plant will increase from US$42.5 million to US$45.5 million.
However, the board of Ambrian believes that mechanical completion is a key milestone in the progress towards commercial production from the Plant and that the market for cement in central Mozambique remains strong and will continue to grow. To ensure early production is achieved on the best possible commercial terms, CdB has recruited a commercial director who is familiar with the cement market in central Mozambique and who will assume this role prior to commercial production.
The board of Ambrian also confirms that Jean-Pierre Conrad, Chief Executive Officer of the Company, made an advance of €300,000 (the "Advance") to CGM (UAE) FZE ("CGM") on 24 June 2015. CGM is a wholly-owned subsidiary of Ambrian. The purpose of the Advance was to expedite payment of certain invoices and expenses incurred in connection with the Plant, specifically payments to contractors and suppliers in order to allow work on key aspects of the facility to be completed. No interest is payable by the Company or its subsidiaries in respect of the Advance, which is repayable by the Company on or before 31 December 2015.
In addition, Mr Conrad made two advances totalling CHF 200,000 (the "Initial Advances") to Ambrian Resources AG ("ARAG"), prior to the completion of the Company's acquisition of the shareholding of Consolidated General Minerals plc in Ambrian Metals Limited and Mr Conrad's appointment as Chief Executive Officer of the Company. ARAG is an 80% subsidiary of Ambrian and is a service company through which certain of Ambrian's employees were previously seconded to Consolidated General Minerals plc. The purpose of the Initial Advances was to expedite payments of certain invoices and expenses incurred by Ambrian Resources AG. No interest is payable by the Company or its subsidiaries in respect of the Initial Advances, which are repayable by the Company on or before 31 December 2015.
The Advance is classified as a related party transaction under the AIM Rules for Companies. Accordingly, the independent directors consider, having consulted with the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.
For further information, please contact:-
Ambrian plc | |
Roger Clegg | +44 (0)20 7634 4700 |
Cenkos Securities plc | |
Neil McDonald | +44 (0)131 220 9771 |
Nick Tulloch | +44 (0)131 220 9772 |
Notes to Editors
Ambrian is active in the physical trading of industrial metals and minerals and holds a substantial interest in a cement mill in Mozambique. Supported by its offices in London, Shanghai, Taipei and Singapore, with further support from a network of agents in North and South America, Asia and the Middle East, Ambrian provides producers and consumers with its marketing insight whilst emphasizing the financing and risk management aspect of its trading activities. Investing directly in industrial assets supports and strengthens Ambrian's physical marketing and value added activities whilst diversifying its revenue base. Ambrian is quoted on the AIM section of the London Stock Exchange under the ticker symbol AMBR.
Further information on Ambrian plc is available on the Company's website: www.ambrian.com.