29 Nov 2017 07:00
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014 until the release of this announcement
29 November 2017
Tri-Star Resources plc
("Tri-Star" or the "Company")
Tri-Star invests a further $6 million in Oman joint venture company SPMP
Tri-Star announces that it has invested a further $6 million via a mezzanine loan to Strategic & Precious Metals Processing LLC ("SPMP") ("SPMP Mezzanine Loan") to assist in further development of the Oman Antimony Roaster Project ("OAR"). The OAR is located in Sohar, Sultanate of Oman. Tri-Star has a 40% equity interest in SPMP.
The investment in SPMP has been financed through the issuance of short-dated secured loan notes ("Loan Notes") to Odey European Inc and OEI MAC Inc (the "OAM Funds"). The OAM Funds are funds under the discretionary management of Odey Asset Management LLP ("OAM").
Terms of the SPMP Mezzanine Loan
The principal terms of the SPMP Mezzanine Loan are as follows:
· $6 million to be invested in SPMP by way of unsecured mezzanine finance subordinated to the existing $40 million senior debt facility;
· An interest rate of 15% per annum, payable in full on redemption of the loan;
· Ranks pari passu with the existing mezzanine loans already in place at SPMP;
· Loan term of five years with SPMP having the option to redeem (with accrued interest to date) from the third anniversary of drawdown.
The terms of the SPMP Mezzanine Loan are principally the same as the existing mezzanine loan of $15 million advanced at the time of financial close of SPMP in September 2015 by the other shareholders in SPMP.
Terms of the Loan Notes
The principal terms of the Loan Notes are as follows:
· $6 million of notes have been issued:
o $3,400,543 to Odey European Inc; and
o $2,599,457 to OEI MAC INC
· The notes are secured on a Debenture comprising a fixed and floating charge over all the assets of the Company;
· The notes are to be redeemed on the earlier of 30 June 2018 or the completion of an equity fundraise by the Company;
· An arrangement fee of 3%; and further costs of up to £100,000 to be paid by the Company;
· The notes accrue interest at 25% per annum, accruing daily and payable on redemption;
· Events of default as are customary for an instrument of this nature and including the insolvency of SPMP.
Related Party Transaction
Since OAM controls 53.8% of the Company's issued share capital, OAM is a related party as defined in the AIM Rules for Companies and the subscription by the OAM Funds for the Loan Notes is deemed a related party transaction under the AIM Rules. Tri-Star's independent directors consider, having consulted with Tri-Star's nominated adviser SP Angel Corporate Finance LLP, that the terms of the Loan Note transaction are fair and reasonable insofar as Tri-Star's shareholders are concerned.
SPMP Financing
SPMP is working with providers of bank finance and its various other stakeholders on an additional funding package to satisfy all SPMP's funding requirements through to commercial production. Further announcements will be made by Tri-Star, as appropriate.
Crispin Odey, Founder, Odey Asset Management, said:
"We are delighted to continue to support the OAR project through this interim loan structure with Tri-Star. We have built up an excellent relationship with our partners in Oman and Dubai and continue to see positive signs for this business as we complete the project and bed down agreements on the feedstock and offtake side."
References to "$" in this announcement mean US dollars.
Enquiries:
Tri-Star Resources plc Tel: +44 (0) 20 3470 0470
Guy Eastaugh, Chief Executive Officer
SP Angel Corporate Finance (Nomad and Broker) Tel: +44 (0) 20 3470 0470
Robert Wooldridge / Jeff Keating
Yellow Jersey PR Limited (Media Relations) Tel: +44 (0) 776 932 5254
Felicity Winkles / Joe Burgess