12/07/2013 - 14:43

Govt refunds bolster Atlantic, Kimberley

12/07/2013 - 14:43

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Cash-strapped miner Atlantic has obtained two new sources of funding, with the company using an expected R&D tax refund to secure a $15.3 million bank loan.

Govt refunds bolster Atlantic, Kimberley

Cash-strapped miner Atlantic has obtained two new sources of funding, with the company using an expected R&D tax refund to secure a $15.3 million bank loan.

Atlantic, along with Kimberley Diamonds, will also gain extra cash from the release of its environmental performance bond.

The vanadium producer said today its subsidiary Midwest Vanadium had secured the new funding line from a “leading Australian bank”.

It’s the latest in multiple funding arrangements that Atlantic has put in place as it continues the protracted production ramp-up at its Windimurra project.

The new loan carries an interest rate of 15 per cent, which would be high for most companies but is well below the 22.5 per cent Atlantic is paying on a $28 million loan from its major shareholder Droxford International.

Atlantic said the new loan will be secured by a priority lien over its rights to receive an R&D tax refund, which it has previously estimated will be worth $24.3 million.

As well as the new loan, Atlantic said it has secured approval for the release of its $8.5 million environmental performance bond.

It joins a growing number of WA mining companies to benefit from a state government decision to replace cash-backed environmental bonds with a new mining rehabilitation fund.

Kimberley Diamonds said today its $12.2 million environmental bond has been released by the Department of Mines and Petroleum.

The miner will use $10.6 million to fully pay an existing loan of $11.2 million owed to Gem Diamonds.

In order to have the bond retired Kimberly Diamonds signed up for the new Mining Rehabilitations Fund (MRF).

The MRF requires tenement holders to submit data to the DMP on an annual basis, declaring the number of hectares disturbed and the type of disturbance, which the DMP uses to calculate the company’s levy.

It replaces the old system which required tenement holders to fund bonds as security that they would fulfil their environmental obligations once mining was complete.

Once a company has signed up for the MRF its old bond is returned.

Last week the DMP returned $20 million of environmental bonds to Pluton Resources and Gunson Resources, while Dampier Gold received a $3.2 million rebate today.

To total value of environmental bonds held by companies is around $1 billion. 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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