NQ Minerals Plc (AQSE:NQMI), has announced that ING Bank N.V., a leading global resources bank, has committed to provide NQ with a USD 41 million banking refinancing facility to assist with the restructuring of the corporate debt that was put in place during 2017 & 2018 to start the mining operations at the Company’s flagship Hellyer Gold Mine in Tasmania, Australia.
The ING facility will have a legal maturity of 6 years at an interest rate of 6.5% plus US LIBOR (1 month). The facility drawdown is now only subject to completion of final documentation and the normal commercial terms previously agreed with ING, and documentation is well advanced in this respect. It also includes an accordion option to increase the amount up to USD 55 million, subject to further conditions, including credit committee approval for the further amount.
This facility will allow NQ to repay Hellyer’s early project debt, reducing the mine’s interest expense by around USD 2.5 million per year.
The facility was introduced and supported by Traxys Sarl, a leading global physical trader and merchant in metals and natural resources, and who currently have an exclusive offtake agreement to buy all of Hellyer’s production through to 2024. The new facility also extends Traxys’ Hellyer offtake agreement from 2024 through to the end of life-of-mine. This extended Traxys offtake provides NQ with valuable trade financing for deliveries made at the local port of Burnie in northern Tasmania, from where Hellyer’s lead/zinc/gold/silver production is sent to world markets.
NQ Mineral’s Chairman, David Lenigas, said; “This refinancing facility with ING represents the culmination of nearly a year’s extensive due diligence with both the bank and Traxys, and reflects the success of the final commissioning phase of Hellyer at its targeted throughput rate of 1.2 million tonnes per year and the establishment of a stable operating environment. I offer my sincere thanks to ING and Traxys for their efforts in navigating this process, especially through a particularly difficult period of uncertainty with this Covid-19 pandemic. NQ looks forward to the start of a productive working relationship with ING. The extension of the offtake agreement with Traxys from 2024 to life-of-mine is also very significant news for the Company, as it secures fortnightly product payments for Hellyer’s production for its entire 10 year mine life. NQ looks forward to the continuation of a very supportive and productive working relationship with Traxys. On drawdown, the Company’s balance sheet will be significantly strengthened, and work will commence to seek a listing on a Tier-1 stock exchange to complement its current London Aquis Exchange listing and OTC Markets trading platforms.”
ING Bank’s Adrian Moroz, Director within Metals, Mining and Fertilisers, said; “The bank is pleased to partner with NQ Minerals, Traxys and the Hellyer Mine in order to provide this refinancing facility. This transaction is noteworthy in that this was achieved throughout Covid, which is a testament to the dedication of all parties involved, as well as the underlying strength of the project.”
Traxys’ William De Landtsheer, Structured Trade Finance Manager, said; “We have been involved with NQ Minerals to support the restart of the Hellyer’s production in 2018. We are very pleased with the professionalism of Hellyer’s team which has delivered the project on budget as expected. It was only natural for Traxys to further assist NQ Minerals with this important debt refinancing initiative, by introducing our banking relationships. The ING facility is a critical milestone in achieving this important target. The extension of the offtake at Hellyer to full life-of-mine will provide NQ Minerals with certainty of payment for their mine production, guarantees early working capital and secures the success of operations for many years to come. Traxys looks forward to working with the NQ Minerals team on its diverse portfolio of mineral resource projects as they bring them in to production.”