23/12/2014 - 13:30

IMC increases Millennium backing

23/12/2014 - 13:30

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Perth-based gold miner Millennium Minerals has negotiated $5 million in additional debt funding from its major shareholder IMC Group but the deal is dependent on Millennium's current bankers agreeing to reschedule debt repayments due at the end of this month.

Perth-based gold miner Millennium Minerals has negotiated $5 million in additional debt funding from its major shareholder IMC Group but the deal is dependent on Millennium's current bankers agreeing to reschedule debt repayments due at the end of this month.

Millennium entered into an agreement with IMC to increase the limit under its existing working capital facility to $12 million.

The company said $3.5 million would be used to repay senior debt, while $1.5 million would be used for working capital purposes.

IMC will be able to convert the extra debt into Millennium shares, enabling it to increase its stake from 35 per cent to 63 per cent.

The interest on the additional $5 million will be at a rate of 15 per cent per annum, however, if shareholders approve IMC’s conversion rights, the interest rate will revert to 10 per cent.

However, among certain conditions required for the agreement to go ahead, Millennium will need BNP Paribas and National Australia Bank to agree to reschedule $3.48 million from its 31 December 2014 debt and have it spread out in smaller payments over the first three months of next year.

Chairman Richard Procter said it was a good result in a very challenging market environment.

“The board is confident that the new executive leadership, with IMC’s support, is positioned to make the necessary changes to improve the operational performance and cost structure of the company,” Mr Procter said.

“These improvements include efficiency and cost reduction initiatives aimed to deliver increased operating margins.”

The news follows Millennium’s announcement last week that it had appointed Glenn Dovaston as chief executive officer, after Brian Rear in August said he would step down from the role.

Mr Rear has taken on the role of non-executive director.

Millennium shares closed 9.68 per cent higher at 3.4 cents per share.

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