SMY sally malay mining limited

project finance, nearly there

  1. 3,800 Posts.

    HOMEX - Perth

    * Macquarie Bank and Standard Bank London to provide project
    financing facility of up to A$52 million

    * Based on current capital estimates and debt facilities no
    additional equity is required to develop Project

    * Limited nickel hedging ensures Company maintains significant upside
    to higher nickel price

    * Statutory approvals are the only outstanding item now to commencing
    Project construction

    * Based on prompt receipt of Statutory Approvals the Project remains
    on track for first shipment of concentrate in March 2004 which is
    only 12 months away


    Sally Malay Mining Limited (ASX:SMY) is delighted to announce that it
    has accepted an offer from Macquarie Bank Limited ("Macquarie") and
    Standard Bank London Limited ("Standard") for a loan facility (the
    "Facility") of up to $52 million to develop the Sally Malay Project .

    The major features of the Facility are as follows:

    * Total funds of up to A$52 million will be available via a
    combination of a Project Development facility and a Cost Overrun
    facility, together the "Facility";

    * Based on the current capital estimate for the SAG Mill flowsheet
    and working capital estimates the Facility together with subordinated
    debt facility from the concentrate customer (Jinchuan/Sino) should
    provide sufficient funds for the Company to develop the Project
    without requiring additional equity from shareholders;

    * Credit approval has already been obtained from both banks' credit

    * The Facility requires a limited volume of nickel hedging to be
    undertaken prior to Facility drawdown which represents less than 15%
    of the total nickel in the Sally Malay resource; and

    * There are only a small number of conditions precedent remaining to
    be satisfied prior to Facility drawdown;

    The Company and the banks will now commence detailed Facility
    documentation which should take 4-6 weeks to complete.


    Macquarie and Standard's willingness to provide this A$52 million
    Facility is a strong indication of the robustness of the Sally Malay
    Project and the Company is delighted to have these banks as partners
    in the Sally Malay Project. The Company can now move forward with the
    Project development knowing that it has access to sufficient funds to
    complete construction and commissioning of the Kimberley's first
    nickel mine, unlocking the value of the Sally Malay deposit for our
    shareholders and other stakeholders.

    Macquarie and Standard are very experienced in resource banking with
    a proven track record and ongoing commitment to the mining industry.
    The banks have dedicated metals and mining divisions and base metal
    trading capacities and are Associate Broker Clearing Members of The
    London Metals Exchange. The banks have an excellent knowledge of the
    base metals markets and have provided project financings for a large
    number of base metals projects in Australia and overseas. They will
    make excellent partners for the Company and we look forward to
    working with them to develop a successful Project.

    The Company would also like to take this opportunity to thank the
    other financial institutions that submitted term sheets for the
    provision of this loan facility.


    With the Project financing now secured the Company's Sally Malay
    nickel-copper-cobalt Project in the East Kimberley of Western
    Australia is only one step away for construction commencing. The one
    outstanding item is receipt of statutory approvals from the WA
    Government which the Company hopes is imminent.

    Assuming Statutory Approvals are received during April 2003 the
    Project timetable is as follows:


    Statutory Approvals April 2003
    Project Financing available for drawdown May 2003
    Plant construction commences April 2003
    Plant commissioning commences January 2004
    First Concentrate shipment March 2004

    P Harold

    For further information contact:
    Peter Harold Keith Liddell

    Telephone +61 8 9225 0999 Facsimile +61 8 9421 1008
    Email [email protected]
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