Renascor Resources’ Shares Surged On ASX Post Announcement Of LOI Issued By Atradius

Renascor Resources’ Shares Surged On ASX Post Announcement Of LOI Issued By Atradius

Renascor Resources Limited (ASX: RNU) is into mineral exploration in Australia, including gold, copper, uranium and other minerals.

The company today, on 10th April 2019, announced that after doing a preliminary assessment of the Siviour Graphite Project, Atradius has issued a Letter of Interest (LOI) on behalf of the Dutch State, where it confirmed the requirement of finance support for its principle project under the Dutch Export Credit Guarantee Scheme (ECA Cover).

Atradius is an official ECA that administers the ECA scheme for the Government of the Netherlands. For the promotion of Dutch exports, Atradius offers insurance and guarantee products for projects involving the export of capital goods from the Netherlands. Dutch exporters are assisted in winning export transactions and increasing the capacity to raise finance from banks for projects involving Dutch exports using ECA Cover from Atradius.

Renascor has estimated that up to approximately 60% of project capital expenditure is expected to qualify under the Atradius ECA Cover. Lenders typically charge less interest rates than commercial interest rates on debt guaranteed by ECA Cover as repayment of the debt is insured with longer tenor also a feature of ECA supported debt.

The first milestone in Renascor’s engagement with Atradius is represented by the LOI. The next step in obtaining ECA cover involves further due diligence by Atradius and, if there is a satisfactory outcome, a positive decision from the relevant committees of Atradius can be secured.

It is common to work with one or more financial institutions parallelly with Atradius to fund the transaction supported by insurance from Atradius. The LOI itself does not constitute a commitment to provide ECA cover, and there is no certainty that an agreement will be reached between the parties. Renascor will assist Atradius through its required due diligence investigations.

The Managing Director of the company, David Christensen said that the LOI from Atradius is a significant achievement in the progress of the company to secure project financing for the Siviour Graphite Project and continues to reinforce Renascor’s aim to become a globally significant graphite producer. David Christensen thanked the Dutch EPC Contractor Royal IHC and financial adviser BurnVoir Corporate Finance for assisting the company in obtaining the significant preliminary support from Atradius. The company is looking forward to working with Atradius through its due diligence process, which will have the benefits of its current work on the Definitive Feasibility Study for the Siviour project. This will give the company easier access to the debt markets and enabling them to accelerate its financing plan.

Recently, the company has released its resources and energy investment presentation along with an update that the mineral lease for the Siviour Graphite Project is granted by the South Australian Minister of Energy and Mining.

On the price-performance front, the stock of Renascor Resources Limited was trading at A$0.021, an increase of ~10.526% during the day’s trade and with a market capitalisation of ~A$21.92 million (on 10th April 19 AEST 04:16 PM). The stock has generated a YTD return of 18.75%, with returns of 5.56% and 11.76% over the past six months and one-month period, respectively. Its 52-week high price stands at A$0.038, and 52-week low price stands at A$0.014, with an average trading volume of ~1.74 million.


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