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STREAMPLAY STUDIO LIMITED Capital/Financing Update 2006
65841_rns_2006-03-06_cb420317-6794-42e9-a3ae-cbe3a9dcc67c.pdf
Capital/Financing Update
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Suite 34, 18 Stirling Highway, Nedlands WA 6009 PO Box 352, Nedlands WA 6909, Australia ABN 31 004 766 376 Tel: (08) 9389 8611 Fax: (08) 9389 8612 E-mail: [email protected] www.gippslanditd.com
07 March 2006
ASX-LSE Announcement
Media Release
GIPPSLAND - IFC - PROJECT FINANCE Debt Arranger for Abu Dabbab Tantalum-Tin Project
Debt Arranging Mandate
The Directors of Gippsland Limited ("Gippsland" or "the Company") announce today that the International Finance CorporationA ("IFC"), a member of the World Bank Group, has been mandated as Lead Debt Arranger for Gippsland's Abu Dabbab Tantalum-Tin Project (the "Project") in Egypt.
The Project cost estimates as at November, 2005, based on the Feasibility Study completed by Lycopodium Engineering Ltd in November 2004, is approximately US$90 million, including capital costs (2Mtpa processing plant, mining fleet, haul roads, power plant, employee accommodation and general infrastructure) and financing costs during the construction period. The targeted debt component is 60% (US$55 million) of the project costs. The debt financing will be raised via a combination of an IFC A-Loan, an IFC B-Loan and parallel financing from other Development Finance Institutions (DFIs) and Export-Credit Agencies (ECAs).
The terms of IFC's involvement in debt financing for the Project is for all intents and purposes, on standard commercial terms and conditions for undertakings of this nature and extent.
The fees payable by Gippsland to the IFC in respect of its arranging role does however include the issuance of 2,250,000 fully paid ordinary Gippsland shares in 3 tranches of 750,000 each in lieu of up front cash appraisal fees to be charged by the IFC. The issuance of this equity is subject to and conditional upon the satisfaction of certain commercial milestones.
The balance of the financing of the Project is to be raised through equity financing of approximately US$35 million, with potential IFC participation.
US$2M Equity Investment by IFC in Gippsland
Pursuant to the Mandate, the IFC has been provided with a 90-day option to subscribe for US$2M of new fully paid ordinary share equity capital in Gippsland. If the IFC exercises its option then this equity investment by the IFC in Gippsland shall be effected as follows:
- By way of the issue of 25 million new fully paid ordinary Gippsland shares at a price of US$0.08 (approx. A$0.108 / UK£0.046) per share to raise US$2 million (approx. A$2.69 / UK£1.14 million) cash for Gippsland unless the volume weighted average price over the 5 trading days prior to the signing of a subscription agreement between the parties is less than A$0.118 (approx. UK£0.05) then the subscription price will be 90% of the said average price.
- The 25 million shares issued to the IFC will each have an attaching free unlisted option having an exercise price of A$0.135 (approx. UK£0.057) and a life of six (6) years.
Gippsland may require the IFC to exercise 12.5 million of these options in the event that Gippsland shares trade at a weighted average price equal to or greater than A$0.20 (approx. UK£0.085) for a period of 20 trading days, or relinguish the 12.5 million options.
The issue of these securities (shares and free attaching options) to the IFC is subject to Gippsland shareholder approval.
Gippsland has agreed to not issue shares or options at a discount to the issue price of the shares or value of the options as the case may be for at least a 6 month period post the issue to IFC. should IFC exercise its option to subscribe the US$2 million.
Further US$3M Equity Investment by IFC in Gippsland
Subject also to Gippsland shareholder approval, Gippsland has granted to the IFC a first right of participation to invest an additional US$3 million at the time of and on the same terms as are offered by Gippsland when raising the equity component of the Abu Dabbab project capital cost. IFC will have 30 days within which to exercise this pre-emptive right,
Feasibility Study Optimisation and Owner's Team
Gippsland continues to work with Lycopodium, IFC Technical Specialist and Metallurgical Consultants to optimise the process flow sheet and finalise confirmatory test work for the Project. The Directors are confident that these tests and findings will have a positive impact on the overall economics of the Project. The finalisation of the optimisation of the Project, in parallel with debt and equity financing arrangements is expected to progress steadily over the next month.
During this optimisation period, Gippsland will expand its Management Team including key positions in Finance, Operations, Project Management, Metallurgy and Geology as it moves from being an exploration company to a World scale mining operation. Gippsland will immediately seek to appoint a financial advisor to assist the Company in finalising debt and equity facilities for the Project.
Speaking from London. Gippsland Executive Chairman Jack Telford stated "Partnering with the IFC is a major milestone in the development of the Abu Dabbab Tantalum-tin Project and the Egyptian mineral resources sector. The tantalum market continues to grow steadily, prices are on the rise and the global supply chain is in a state of uncertainty as a result of an announced major tantalum mine closure. Abu Dabbab's scheduled 3Q07 start-up could not be timed better."
RJ (Jack) Telford Executive Chairman
For further information:
Jack Telford Gippsland Limited Tel: +61 (0)8 9389 8611 [email protected] www.qippslandltd.com
Leesa Peters / Laurence Read Conduit PR Tel: +44 (0)20 7429 6666 [email protected] [email protected]
Les Polden HB-corporate Cell: +44 (0)773 680 8095 Tel: +44 (0)20 7510 8576 [email protected]
A Established in 1956, IFC (www.ifc.org) is the largest multilateral source of loan and equity financing for private sector projects in the developing World where it promotes sustainable private sector development primarily by financing private sector projects, assisting private companies, financing in international financial markets whilst providing advice and technical assistance to businesses and governments. Its strong shareholder base, triple-A ratings, and the substantial paid-in capital base allows the IFC to raise funds for its lending activities on favourable terms in the international capital markets.