TSTR.L Regulatory News (TSTR)

Tri-Star Resources Plc - Update on SPMP

PR Newswire

London, April 8

Tri-Star Resources PLC / AIM: TSTR / Sector: Natural Resource

8 April 2020

Tri-Star Resources plc ("Tri-Star" or the "Company")

Update on SPMP

Tri-Star Resources plc (AIM: TSTR), the minerals processing company, announces an update on its investment in Strategic & Precious Metals Processing LLC (“SPMP”) an antimony and gold production facility in the Sultanate of Oman in which the Company holds a 40% equity interest. The other joint venture partners are The Oman Investment Fund Holding Company LLC (“OIF”) (40% equity holder) and DNR Industries Limited (“DNR”) (20% equity holder).

Operations

Ramp up of antimony production is continuing at a steady pace moving towards operating at 50% capacity in the near future following which, SPMP expects to move to full capacity by the end of the year, subject to any impact upon operations caused by the Coronavirus pandemic (see below).

SPMP started producing and selling gold in November 2019. 

Financing of SPMP

SPMP has signed a term sheet with local banks to provide a USD 60m term loan facility. In addition, the banks have expressed an interest in providing a working capital facility of up to USD45m (out of a total required of USD 60m as announced on 3 January 2020) subject to meeting certain criteria. 

A total of USD40m has been injected by OIF and DNR into SPMP on terms which have yet to be agreed between the shareholders.

OIF has issued a Request for Arbitration, commencing an arbitration proceeding with Tri-Star, DNR and SPMP as Respondents. OIF seeks declaratory relief, inter alia, that the funds invested by OIF and DNR in SPMP be considered as equity at a price to be determined by way of valuation. Under Omani law, a unanimous resolution of the shareholders is required to increase the share capital of SPMP. Tri-Star has previously exercised its right not to adopt such a resolution. Tri-Star’s legal advice is that OIF’s claim has no merit and is, in fact contrary to the terms of the Shareholders’ agreement and the provisions of Omani law in this regard and, accordingly, Tri-Star intends to vigorously defend this action.

The duration of the arbitration proceedings could be lengthy but Tri-Star will continue to seek consensus with OIF and DNR as to the terms upon which their funding has already been provided.

Effect of the Coronavirus pandemic

To date the Coronavirus pandemic has had little impact upon the operations of SPMP. The situation is changing rapidly, however, with access to the Freezone due to be restricted. SPMP is working with the authorities to agree a plan that allows critical employees to continue working, on a safe basis, to ensure that production can be maintained.

The Coronavirus pandemic has had a negative impact upon the antimony market and prices, in particular France and Belgium (the two biggest consumers of antimony metal outside of China), are in “lock down”. Nevertheless, this is not expected to have a significant impact upon the long-term viability of the plant as prices are expected to recover in the medium term. The Coronavirus pandemic may have an impact upon supply of feedstock whilst there are restrictions in movement and mining activities.

Extension to filing deadline for Final Results due to the Coronavirus pandemic

Tri-Star also announces that there will be a delay in the publication of the Company's audited financial results for the year ended 31 December 2019 ("Final Results").

At the request of the Company's auditors, Grant Thornton, the Company has requested and received an extension to its filing deadline for its Final Results from 30 June 2020 to 30 September 2020. This is in light of the fact that Grant Thornton are presently unable to review SPMP’s audit files in Oman due to a firm-wide travel ban as a result of the Coronavirus pandemic.

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.

**ENDS**

For further information, please visit www.tri-starresources.com or contact:

Notes to Editors:

Tri-Star’s principal interest is in an antimony and gold production facility (the “SPMP Project”). The SPMP Project is based in Sohar, Sultanate of Oman, and is being developed by Strategic & Precious Metals Processing LLC (“SPMP”), an Omani company in which Tri-Star has a 40% equity interest.