THE BOURSE WHISPERER: Metallica Minerals (ASX: MLM) has executed binding agreements with a private company to provide a $2 million standby credit facility.
Metallica Metals explained the selection of the private Queensland-based group with interests in property development and resources, follows a competitive tender process the company announced in March.
The private company is a related party to an existing shareholder of the company.
Having also completed a recent Rights Issue and underwritten options exercise, Metallica is fully funded to progress development of the company’s Urquhart bauxite project in northern Queensland, with access to $6.4 million.
Metallica declared the execution of the Standby Facility as a prudent financial measure as it looks to bring the Urquhart bauxite project into production in 2017.
The funds will provide additional balance sheet flexibility during the project’s construction and ramp-up phase, should it be required.
“By providing the Standby Facility the private lender has shown its support for Metallica and its plans to become a bauxite producer,” Metallica Minerals CEO Simon Slesarewich said in the company’s announcement to the Australian Securities Exchange.
“This important milestone delivers on the company’s financing plans detailed in March this year.
“The finalisation of this Standby Facility is prudent risk management and the facility will only be drawn down in the event that additional capital resources other than that currently envisaged are required.
“The company is delighted to partner with the selected lender and would like to thank its principals for their ongoing support.”