Mining Journal > Finance > Metorex announces equity raising, debt holiday

Finance

Metorex Ltd, the DRC copper miner, says it intends to raise US$100 million in an equity raising, while also refinancing its debt facility.

The funds will be used to reduce debt on the Ruashi project facility by US$35 million to US$100 million, place the Consolidated Murchison antimony mine in South Africa on care and maintenance, complete a feasibility on the Dilala East project and complete similar studies on the assets of subsidiary, Copper Resources Corp.

Chief executive, Terence Goodlace, says the company has already received upfront commitments for more than 80% of the target amount.

“This capital raising will significantly strengthen the Metorex balance sheet and sets the scene for new project development and value creation,” said Mr Goodlace.

Once the company has paid down its debt, it will also ring-fence the facility to the Ruashi mining project. Metorex will be granted a debt-repayment holiday during calendar 2010. The existing debt repayment profile will also be restructured to US$16 million every six months from US$25 million.

“The debt holiday will allow a significant strengthening of the Metorex balance sheet during the next twelve months by allowing Metorex to focus on growth and expansion projects, where we hope to create substantial shareholder value,” said Mr Goodlace, “It will also allow Metorex to comfortably live out the balance of the unfavourable pricing on hedges incurred during 2008, which expire by June 2010.”

Over the past two years the company has been rolling out a “survival” strategy which included the raising of funds, selling non-core assets and restructuring its management team.“Our new focus will be on sustainable growth and expansion, whilst maintaining strict operational, financial and technical standards."

The company’s current development projects include the Central African Copperbelt deposits at Musonoi (Dilala East), Kinsenda and Lubembe in the DRC.