SRX.L Regulatory News (SRX)

10 Jan 2006 07:01

Titanium Resources Group Ltd10 January 2006 Titanium Resources Group Draws Down Balance of European Union €24.75 million Loan 10 January, 2006: Titanium Resources Group ("TRG" or "the Group") announces thatit has satisfied all outstanding conditions pertaining to refurbishment of theSierra Rutile mine and has thereby qualified for, and drawn down, the second andlast tranche of the €24.75 million loan provided by the European Commission, onbehalf of the European Union (EU). The loan will be used for the restart of theSierra Rutile mine in Sierra Leone. This latest draw down of €4.75 millionbrings total disbursements under the EU Loan to approximately €23 million. Thebalance of €2 million will be disbursed upon physical completion of the SierraRutile restart project which is expected to occur in the first quarter of thisyear. A total of €25 million is being provided to the Government of Sierra Leone, tobe on-lent to Sierra Rutile Limited, a subsidiary of TRG. The total term of theEU Loan is twelve years, comprising a seven year grace period followed by fiveyears of repayment of principal in equal semi-annual installments to theGovernment of Sierra Leone. The repaid principal and interest will be paid to ajoint Government of Sierra Leone/ European Commission fund which will supportvarious socio-economic development projects in Sierra Leone. The loan carries aninterest rate fixed at 8% per annum. The first interest payment is not payableuntil 36 months after the date of the first disbursement. Mr. Walter Kansteiner stated: "Titanium Resources Group is grateful for the financial support of the EU andthe Government of Sierra Leone for the restart of the Sierra Rutile mine. Themine is the single largest non-governmental employer in the country. As in thepast, the mine is expected to account for a majority of the country's foreignexchange earnings and a significant part of its GDP. This final disbursement ofthe EU Loan will facilitate the anticipated restart of the mine in the firstquarter of 2006." Ends For further information TRGWalter Kansteiner, ChairmanTel: +44 (0) 207 321 0000 Aura FinancialMichael OkeAndy MillsTel: +44 (0) 207 321 0000 This press release has been issued by TRG and is the sole responsibility of thecompany. This press release does not contain or constitute an offer orinvitation to purchase or subscribe for any securities of TRG and should not berelied on in connection with any decision to purchase or subscribe for any suchsecurities. The securities referred to herein have not been and will not be registered underthe U.S. Securities Act of 1933 and may not be offered or sold in the UnitedStates absent registration under the Securities Act or an available exemptionfrom it. Notes to Editors Titanium Resources Group Titanium Resources is the holding company of a group of companies that areengaged in the mining, marketing and exploration of mineral resources. The Groupowns two mining operations in the Republic of Sierra Leone - the Sierra RutileProject and the SML Bauxite Project. Both mines operated for over 15 years untiloperations were suspended in 1995. The projects accounted for 75 per cent ofthe exports of Sierra Leone. The Sierra Rutile Project will employ conventional dredging and processingmethods to produce mineral sands in the southwest of Sierra Leone, where itsproduction previously represented approximately 30 per cent of the world'sannual supply of natural rutile. Natural rutile is a high titanium-bearingfeedstock employed in the manufacture of titanium dioxide (TiO2) pigments thatare used in paint, plastics, paper and pharmaceuticals and the production oftitanium metal and welding rods. In close proximity to the Sierra Rutile mine is the SML Bauxite Project whichsuccessfully mined bauxite in the Mokanji area for over 30 years prior to thesuspension of operations in 1995. Bauxite from the SML bauxite mine is premiumgrade metallurgical bauxite which is the primary feedstock used in theproduction of aluminium. Both projects will employ proven mining and processing techniques and wereprofitable operations in the past. Rutile and bauxite from this region are bothrecognised for their high quality. The Group plans to restart operations at eachmine in the first quarter of 2006. The Loan Agreement with the Government of Sierra Leone The following is an extract from the AIM Prospectus published by TRG in August2005. "A loan agreement (the "Loan Agreement") between SRL and the Government, dated 2August 2004, pursuant to which the Government will on-lend US$24,750,000 of theUS$25,000,000 that was granted from the European Commission in connection withthe Sierra Rutile Project (the "Loan"). US$250,000 of the Loan has been retainedto cover the cost of auditing the Sierra Rutile Project and a further 10 percent of the Loan will be held back by the European Commission by way ofguarantee to cover SRL's obligations until completion of the Sierra RutileProject. SRL will pay to the Government 8 per cent interest per annum on the principalamount of the Loan disbursed and outstanding. The interest payments fall duesemi-annually on 15 June and 15 December of each year. The first interestpayment is not payable until 36 months after the date of the first disbursement.The principal and any deferred interest on the Loan shall be repaid in 10 equalinstalments, the first to be made 84 months after the date of the firstdisbursement." This information is provided by RNS The company news service from the London Stock Exchange