Avenira Ltd Provides Funding Update; Working Capital Needs of ~A$11m to A$14m

Avenira Limited (ASX: AEV) is a phosphate rock mining company. The company is focused on developing a portfolio of production assets and agricultural minerals that will generate long term shareholder value and supply agricultural nutrients, which are critical for global food security.

The company today, on 14th May 2019, updated investors about its funding plan. The company’s 80% subsidiary, Baobab Mining and Chemicals Corporation is in the process of arranging unsecured loans with the three major shareholders; Agrifos Partners LLC, Tablo Corporation and Agrifields DMCC.

This is in relation to continuing fundraising discussions with the potential financing partners to seek its estimated working capital funding needs up to full project finance of approximately $11 million to $14 million, targeting the Final Investment Decision during the first half of 2020.

The non-binding term sheets have been executed, and formal binding loan agreements are being finalised. The aggregate funding amount to be made available to BMCC under the shareholder loans is approximately $1.0 million, with the funds to be drawn down subject to the execution of binding loan documents, expected this week.

The shareholder loans will be advanced on the terms that it will have a maturity at 30th September 2019 or as extended by agreement between the parties, the interest rate on loan will be accrued at 10% per annum, the shareholder loans will be between the company’s 80% subsidiary BMCC and the lenders, to be drawn down in tranches over the weeks ahead.

As a part of the pre-project finance fundraising activities, the company is currently continuing discussions with the West African regional commercial banks to avail short-term credit line facilities to one of its Senegalese subsidiaries for approximately US$8 million. These credit line funds will be used in financing the company’s working capital funding needs to Final Investment Decision, including the funding of planned Value Engineering studies and Bankable Feasibility Study. The company will continue to explore other funding avenues to complement these proposed credit line facilities.

As per the cash balance of Avenira of $0.7 million on 30th April 2019, its cash runway currently extends to end July 2019, assuming the shareholder loans are secured.

On the cash flow front, the company reported a cash outflow from operating activities of ~$1.89 million during the quarter ended 31 March 2019. The cash outflow from investing activities stood at ~$0.015 million for the March quarter 2019. However, there was a cash inflow from financing activities of ~$0.944 million, primarily driven by borrowings of ~$1.26 million. The cash and cash equivalents at the end of the quarter stood at ~$1.310 million as compared to ~$2.259 million in the previous quarter.

On the price-performance front, at market close on 14th May 2019, the stock of Avenira Limited was trading at $0.014, with a market capitalization of $15.88 million. The stock has yielded a negative YTD return of 11.76%, along with negative returns of 25.0% and 21.05% over the past six months and one-month period, respectively. Its 52-week high price stands at $0.035, and 52-week low stands at $0.013, with an average trading volume of 185,619.


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