08/01/2020 - 14:30

Gulf secures $84m funding for smelters

08/01/2020 - 14:30

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Gulf Manganese Corporation has secured further funding for the construction of two smelting hubs in Indonesia, with €52 million ($A84 million) expected to be received later this month.

Gulf secures $84m funding for smelters
The Kupang Smelting Hub Facility is located in West Timor, Indonesia. Photo: Gulf

Gulf Manganese Corporation has secured further funding for the construction of two smelting hubs in Indonesia, with €52 million ($A84 million) expected to be received later this month.

The company said it would use the funds to finish the construction and commissioning of the first two smelting furnaces at the Kupang Smelting Hub Facility in West Timor, with construction currently 60 per cent complete.

Gulf said it would require up to a further seven months to complete the two smelters.

Legal and General Investment Management will provide the new loan, while HSBC will provide the underpinning collateral and standby letter of credit.

It comes on top of a $15 million construction loan from Indonesian investment group PT Jayatama Tekno Sejahtera in 2018.

In 2018, Gulf managing director Hamish Bohannan said this funding would be sufficient to complete construction of the first two smelters.

Today, the company made similar comments, saying it was now fully funded to complete the works.

“This loan facility also provides Gulf with the ability to ramp-up its high-grade manganese mining and exploration activities in Indonesia, taking advantage of its licence to export manganese concentrate,” Gulf said in an ASX announcement.

The company said funds would also be used to advance its joint venture with Iron Fortune – an Australia-based mineral exploration company focused on Timor-Leste.

In 2018, Gulf paid a total $300,000 in cash and issued $100,000 worth of company shares to secure a 20 per cent interest in Iron Fortune.

Shares in Gulf rose 40 per cent today to trade at 0.7 cents per share, as at 4pm AEDT.

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