Medallion Metals Ltd (ASX: MM8), ('Medallion' or the 'Company') is pleased to announce it has selected Trafigura Pte Ltd ('Trafigura') to exclusively arrange and provide a prepayment facility and copper concentrate and gold dore purchase agreements for the proposed development of the Ravensthorpe Gold Project ('RGP') and processing operations at Forrestania ('the Project').
Key Points: Medallion has selected Trafigura Pte Ltd (Trafigura) to exclusively arrange and provide a Senior Secured Prepayment Facility and Copper Concentrate and Gold Dore Purchase Agreements (together, the 'Agreements'). The Agreements are subject to long form definitive documentation and relevant conditions precedent including due diligence and relevant approvals. The proposed up to US$50 million facility (the 'Facility'), which has no commodity price hedging requirements, will underpin the funding required for the development of the Ravensthorpe mine and processing operations at Forrestania
The Agreements will also provide for Trafigura to purchase copper/ precious metal concentrate produced from the Project under a 7-year offtake arrangement and a separate agreement for gold dore (the 'Commercial Offtakes')
The Agreements constitute a pathway to establishing key commercial contracts that will facilitate Project development by combining debt funding and offtake with a single, globally recognised counterparty on commercial terms attractive to the Company Technical, financial and legal due diligence will commence and will run in parallel with the completion of the Feasibility Study
Managing Director, Paul Bennett, commented: 'Medallion is pleased to be working alongside Trafigura, a global leader in commodity supply, as we advance the next phase of growth for the business. The strong level of interest received during the tender process is a clear endorsement of our sulphide development strategy, which provides dual exposure to gold and copper. Copper not only enhances the Project's already compelling economics, the strong demand for the concentrate has opened access to a strategic funding source capable of delivering the foundation capital required to underpin development. I'd also like to thank the parties who participated in the offtake tender for their time and efforts through what was a highly competitive process.'
Following an extremely competitive process, the Company has selected Trafigura Pte Ltd to exclusively arrange and provide offtake and debt financing for the Project. Subject to the satisfaction of relevant conditions precedent including technical, financial and legal due diligence and relevant approvals, the proposed Facility is for up to US$50 million (A$77 million, US$:A$0.65) with a four-year term commencing from initial disbursement, including a one-year grace period followed by a three-year repayment period. Summarised indicative terms and conditions for the Facility and Commercial Offtakes are set out in Annexures B and C, with a key feature being commodity price hedging is not a requirement. Definitive terms and conditions for the Facility and Commercial Offtakes are to be agreed in long form documentation. Subject to the agreement of long form documentation for the Facility and Commercial Offtake and relevant approvals, the Facility is expected to provide the key development capital tranche required to fund the Project through to commercial production. Further details of the indicative Facility terms are provided in Annexure B. It is expected that the copper concentrate/ precious metals offtake will extend for a seven-year term and provides for a minimum delivery of 105 thousand dry metric tonnes (dmt) of copper/precious metals concentrate (the Concentrate) to Trafigura, if the maximum amount of US$50 million is drawn under the Facility. The minimum offtake quantity may be reduced by up to 20 thousand dmt should Medallion elect to draw a maximum of US$40 million under the Facility. As regards the gold dore offtake, it is expected that this offtake will be conditional on Medallion drawing amounts under the Facility. Further details of the indicative Commercial Offtake terms are provided in Annexure C.
CAUTIONARY STATEMENT
The Company cautions that the indicative terms submitted by Trafigura are non-binding and should not be construed as an expressed or implied commitment on the part of the interested parties to enter into offtake or finance transactions. Any transaction that might eventuate from these indicative terms will be subject to the parties entering into legally binding documentation and obtaining customary approvals for transactions of this nature. This announcement should be read in conjunction with the statements on page 3, which forms an integral part of this announcement.
Contact:
Paul Bennett
Tel: +61 8 6424 8700
Email: info@medallionmetals.com.au
Web: www.medallionmetals.com.au
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