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Operations update and update on strategic investor

12 Jul 2013 07:00

RNS Number : 1686J
Strategic Natural Resources PLC
12 July 2013
 



Strategic Natural Resources Plc

("SNR" or the "Company")

 

Operations update and update on potential strategic investor

 

SNR, the AIM listed natural resources developer operating in South Africa, is today providing a update on its operations and discussions with potential strategic investors. SNR has a 74% owned subsidiary, Elitheni Coal (Pty) Limited ("Elitheni"), which owns and operates a coal mine in the Eastern Cape of South Africa.

 

Operations update

 

In the Company's interim results announcement on 31 May 2013 the Board stated its target of delivering coal from the Elitheni Mine to the Port of East London by the end of June/early July 2013, to enable the shipment of the first cargo of coal from the Elitheni Mine. The Company has reached an agreement with a customer that the coal will be available for the customer's collection from the port at the end of July/during August.

 

Over the last couple of months the Company's operations at the Elitheni mine have continued to improve in the underground mining section, with valuable input from technical consultants. Despite some operational challenges, the wash plant continues to improve yields and the Company has successfully demonstrated its road and rail logistics from the mine, with over 500 containers of washed product having been delivered to the port.

 

Update on a strategic investor

 

Discussions have been progressing positively with a number of potential investors and the Board have narrowed down the list to a shortlist of three who are in advanced discussions with the Company. The Board hopes to be able to conclude a transaction in the near future. The Board notes the recent press speculation concerning a potential bid for the Company and confirms that it knows of no such potential bid. It continues to be the Board's intention that any investment in SNR would not trigger an offer under the Takeover Code or that any investment in Elitheni would result in the Company's shareholding falling below 51.0%.

 

The Board views an investment by a strategic investor as an opportunity to accelerate the development of the Elitheni Mine and to secure the long term funding that will also allow the Company to refinance its existing short term bridging loan with Land Consultants Limited ("LCL") (which is repayable by July 30th 2013), as well as providing funding for SNR's growth plans. The Board has held encouraging discussions with LCL on the possibility of extending the term of the short term bridging loan, if the transaction with a strategic investor is not concluded by the repayment deadline. In the event that an investment is not forthcoming then the Board will have to consider alternative ways of repaying LCL and financing the Company, including issues of equity or the taking on of additional debt. There can be no guarantee that such alternative funding will be available.

 

Gabriel Ruhan, CEO of the Company, commented: "I am very encouraged by both the level of interest and calibre of companies interested in becoming a strategic investor in SNR and am optimistic we can conclude the right deal soon. Operationally, improvements and progress continues to be made at the mine and I look forward to the shipment of the first cargo of Elitheni coal."

 

For further information, please contact:

 

 

Strategic Natural Resources plc

 

Andy Brennan, Chairman

Gabriel Ruhan, CEO

+44 (0)20 3328 5656

 

 

Allenby Capital Limited - Nominated Adviser and Joint Broker

 

Nick Naylor/James Reeve

+44 (0) 20 3328 5656

 

 

SP Angel Corporate Finance LLP - Joint Broker

 

Tercel Moore

+44 (0) 20 3463 2260

 

 

FTI Consulting

+44 (0) 20 7831 3113

Ben Brewerton/Georgia Mann

 

 

For further information about Strategic Natural Resources plc please visit www.snrplc.co.uk

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
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