PERTH (miningweekly.com) – ASX-listed Nickel Mines has secured an $80-million funding package from Decent Investment International Private, an associate of the company’s operating partner Shanghai Decent Investment, to fund its increased stake in the Ranger nickel project, in Indonesia.
Nickel Mines in April this year announced plans to increase its shareholding in the Ranger project from 17% to 60%, ahead of first production, at a cost of $121.4-million.
The ASX-listed company has previously said that the acquisition would be funded through a $160-million financing package, of which $100-million would comprise senior secured debt, and $60-million of equity.
Nickel Mines on Tuesday reported that the binding term sheet with Decent Investments secured $80-million in funding at an interest rate of 6% plus the greater of a three-month LIBOR or 2.5% a year, with an interest period of one month.
The principal amount will be repaid in installments starting in November 2020 at an amount equal to 1/15 of the amount borrowed.
Meanwhile, under the term sheet, Shanghai Decent or its associated have agreed to receive $40-million worth of Nickel Mines shares as partial consideration for the 43% interest in Ranger Investment that they are divesting to Nickel Mines.
Concurrently, Nickel Mines would also seek to raise an additional $30-million of equity through a share placement to a selection of professional investors.
MD Justin Werner said on Tuesday that the company was pleased with the agreement on a simplified debt package with ‘very attractive’ terms, which will allow the company to accelerate the acquisition of an increased stake in Ranger.
“While the funding package originally announced in April was the result of an extensive and competitive process, the opportunity offered a simplified and more attractive debt funding arrangement that allows Nickel Mines to accelerate its interest in Ranger,” said Werner.
“Nickel Mines also welcomes the further strengthening of its relationship with Shanghai Decent the funding package brings, both through the debt facility and the intended conversion of a significant portion of the Ranger acquisition consideration into Nickel Mines shares.”
Commissioning of the first kiln at Ranger is expected to start before the end of the month, with the second kiln to be commissioned some 45 days after.