North River Resources Plc Namib Project Development and Funding Update (7046T)
22 Julio 2015 - 1:01AM
UK Regulatory
TIDMNRRP
RNS Number : 7046T
North River Resources Plc
22 July 2015
North River Resources plc / Ticker: NRRP / Index: AIM / Sector:
Mining
22 July 2015
North River Resources plc ("North River" or the "Company")
Namib Project Development and Funding Update
North River, the AIM quoted resource company focused on the
Namib Lead-Zinc Project in Namibia (the "Project"), announces the
following update in respect of its Namib project, and the Project's
associated financing plan.
As previously announced, the Company submitted its application
for a Mining Licence in April 2014 while working through the final
phase of the definitive feasibility study ("DFS"), which was
announced in November 2014. The results of the DFS, in combination
with a detailed Board-level review, identified key additional
studies on the mine development plan and mining process flow sheet
that would be required ahead of the Company being in a position to
take an investment decision on the Project.
The Company advanced these studies during H1 2015, announcing
the results of the metallurgical test work programme on 22 July
2015. This positions the Company to commence Front End Engineering
& Design ("FEED") on an optimised processing plant as well as
providing the catalyst to progress early mine development work.
Subject to funding, the Company expects to be in a position to
complete these phases of work during Q4 2015, which will be
sufficient to support an investment decision on the Project.
The Company is cognisant that this constitutes a revised
timeline to project development. The requirement to complete these
additional studies, alongside discussions with the Ministry of
Mines and Energy on the award of the Mining Licence, have delayed
the originally scheduled commencement of construction of the Namib
project. As regards the Mining Licence, the Company is pleased to
have hosted the newly appointed Minister of Mines and Energy, the
Honorable Obeth Kandjoze, as well as a ministerial delegation on a
recent site visit at the Namib Project. The Company looks forward
to continuing to work with the Ministry on the licence
application.
In light of this, the Company would like to provide guidance to
Shareholders on the Project's revised funding strategy:
1. Subject to timing of commencing construction and the
definitive capital estimate post completion of early engineering
and design, the Company estimates a total funding requirement of
between US$25m and US$30m through to expected project
commissioning. It is planned to structure this financing in two
phases:
a. An initial equity fundraising to cover the short term working
capital required to cover initial FEED, early development of the
North decline, sourcing of plant and equipment, and the ongoing
underground development programme required to establish access for
the next phase of resource expansion drilling. This will finance
the Company to take the project through to a construction decision;
and
b. A second fundraising, subject to having received the Mining
Licence from the Namibian authorities. This fundraising, comprising
of both debt and equity, will cover the cost of construction and an
ongoing resource expansion drilling programme.
It was originally anticipated that part of the Company's further
equity requirement would be met from the remainder of the
conditional commitments from Greenstone Resources LP ("Greenstone")
as set out in the Investment Agreement signed in July 2014
("Investment Agreement"). The Company has to date received two
funding tranches from Greenstone, amounting to a total of US$6
million. The remaining third and fourth tranches, totaling US$6m
("Final Tranches"), are subject to the completion of a number of
project milestones. A review of the Investment Agreement has now
been conducted by the Board (excluding Mark Sawyer, Greenstone's
representative), under the Project's revised development timeframe.
Following this review, the Board does not believe that these
project milestones, including inter alia completion of the
engineering design work to the degree of accuracy required under
the Investment Agreement, are now achievable before the Investment
Agreement's long-stop date of 4 October 2015. The Board has
therefore notified Greenstone to this effect, and as a result the
Company and Greenstone have agreed to terminate the current
Investment Agreement. However, Greenstone has indicated that it
remains a committed shareholder and is supportive of the Company's
development plans for the Project and the next phase of work.
At this current time, the Company's cash resources total
approximately US$0.5m. The Company's intention with regard the near
term financing plan will be set out in more detail in due course,
together with notice of a General Meeting to seek shareholder
approval for the revised financing plan. As previously advised this
will include details of an offer to participate for existing
shareholders.
North River CEO James Beams said, "We believe that the Namib
Project continues to demonstrate the qualities of a robust and low
risk development opportunity which will provide a strong platform
for establishment of the Company's operational phase. Subject to
receiving the Mining Licence the Company will be well positioned to
establish the debt and equity packages necessary to progress the
Project through development, thereby unlocking the Project's near
term production potential."
**ENDS**
For further information please visit www.northriverresources.com
or contact:
James Beams North River Resources Tel: +44 (0) 20 7025
Plc 7047
Andrew Emmott/ Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Elisabeth Cowell/ St Brides Partners Tel: +44 (0) 20 7236
Limited 1177
Lottie Brocklehurst
This information is provided by RNS
The company news service from the London Stock Exchange
END
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