THE BOURSE WHISPERER: Matilda Zircon is expecting its cash till to ring the bell with USD$13 million in revenue about to hit from the second shipment of high‐value zircon‐rutile Heavy Mineral Concentrate (HMC) from the company’s Lethbridge South mine in the Tiwi Islands.
The revenue will be a healthy boost to Matilda’s cash position, which stood at $5.9 million at 30 June 2012, which the company said will enable it to repay the debt it carries and to assist with funding the development of its Keysbrook project in Western Australia.
The company said it is now poised to make a transition from being a relatively small mineral sands miner to a sizeable producer with cashflow and growth prospects.
“We now have a substantial cash position with further inflows expected over coming months, including the third and final shipment from Lethbridge South,” Matilda Zircon chief executive Trevor Matthews said in the company’s announcement to the Australian Securities Exchange.
“This cash will give us the financial capacity to continue to advance the development of Keysbrook, which will be a game‐changer for Matilda, and drive a step‐change in the valuation of the company.”
The sale of almost 10,000 tonnes of HMC was made to China’s largest mineral sands processor, Tricoastal Minerals (Holdings) Company Limited, which is contracted to acquire all the HMC from Lethbridge South.
A final shipment from Lethbridge South is scheduled for the fourth quarter.
Matilda anticipates receiving 90 per cent of the sales proceeds early next week with the balance to be adjusted in accordance with assay results and paid once the product has been shipped to Haikou Port in China.
The company said the injection of cash means it can consider bringing forward repayment of $4.5 million it owes fellow WA mineral sands group Doral and may also repay the $1 million owed to major shareholder Stirling Resources.
Matilda has until 27 September 2012 to repay Doral, however, once that debt has been paid, it will trigger the start date of Doral’s 90‐day option to take a placement in Matilda ordinary shares (250 million Matilda shares at 23 cents per share).
If Doral elects to exercise this option, it would take an approximate 15 per cent shareholding in Matilda.
The move would also deposit a further $5.75 million into Matilda’s coffers.