On 18 February 2019, New Century Resources (ASX: NCZ) announced the execution of legally binding documentation for working capital facilities of up to A$100 Mn with Värde Partners which is a leading global investment firm. Out of A$100 Mn, A$60 Mn will be treated as senior debt facilities (secured) with a term of 2.5 years with an interest rate of 8% per annum and first ranking security overall century assets whereas A$40 Mn will be treated as junior debt facilities (unsecured) with a term of 3 years, carrying an interest rate of 10% per annum.
The Senior Debt is available for drawdown and will immediately be used to extinguish and replace New Century’s current facility with National Australia Bank (NAB). No early repayment penalties apply to the NAB facility (A$20 million of the NAB facility previously drawn to date).
The Junior Debt remains subject to completion of modest technical and commercial tests by 30 August 2019 and MMG Limited’s consent before being available for drawdown.
The Debt Facilities also include a limited term capped silver royalty, which says that silver royalty for senior debt will be 20% of payable silver production limited to 4 years (capped at US$5 Mn total), and for junior debt 35% of payable silver production limited to 4 years (capped at US$4.5Mpa). New Century will also be required to pay customary fees associated with the establishment of the Debt Facilities and early repayment fees (if incurred).
As part of the entry into the Debt Facilities with Värde, the Company has elected to cancel the existing A$20 million prepayment facility with MRI Trading (without cost), which was not utilized.
The company’s Board says that obtaining additional working capital is a prudent measure to ensure a substantial cash buffer to complement the growing cash flows from concentrate shipments along with the execution of the Phase 2 ramp up the program from 8 Mtpa to a 15 Mtpa mining rate at the Century Zinc Mine.
In the operational highlights of NCZ, Production to date has now surpassed 50,000dmt of zinc concentrate, Hydraulic mining rate up to 7.3Mtpa with the plan for expansion to 8Mtpa – 10Mtpa via the implementation of a third cannon on schedule for the completion by the end of Q1 2019, Zinc recoveries now regularly above 45% with up to 51% total recovery achieved to date, Shipping and spot sales contracts to date totaling 80,000dmt of zinc concentrate, continuing concentrate spot sales into Europe and China and first sales into Australia.
NCZ also confirmed that its operational infrastructure, including its 300km underground concentrate slurry pipeline and port facility at Karumba, has been unaffected by the recent extreme weather events in Queensland.
New Century Resources is an Australian base metal producer who acquired Century Mine (Zinc) in 2016, and after its rehabilitation, it entered the production phase in August 2018.
On stock information front, New century’s share price surged by 4.375% to A$0.835 (ASX: 2:45 PM, February 18, 2019) and the market capitalization of NCZ stood at ~A$403.18 Mn. The company reported a loss of $123,310,765 for FY2018 with diluted loss per share of 32.32 cents per share. The stock has provided a YTD return of 3.23% & also posted returns of -31.03%, 13.51% over the past six months and three months period respectively. It had a 52-week high price of $1.475 and touched 52 weeks low of $0.570, with an average volume of ~ 1,033,538.
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