The troubled Discovery Metals has been given a lifeline as its lenders have granted a further waiver to the Repayment Schedule that will save the company and keep its Botswana project alive.
The ASX listed junior explorer/ producer said on Monday the move is reflective of the ongoing support it is afforded by the lenders at a time when there are uncertainties over its future while its faces union backlash following retrenchment of over 80 employees.
According to the Australian company, a principal repayment of US$17.5 million (about P 155.9 million) was due and payable on 31 December 2013, however, in the 31 December 2013 announcement, the repayment and all interest owing up until 31 December 2013 under both the PF Facility and the SCRFA, totalling US$2.2 million (about P19.5 million), was deferred until 15 January 2014.
Under the new deal, the scheduled repayment date for the principal repayment has been deferred until 31 March 2014 while all interest owing up until 15 February 2014 on the PF Facility and the SCRFA has been deferred until 28 February 2014.
“Lenders have also acknowledged that that the Company may from time to time request that the lenders consent to withdrawals from the Debt Service Reserve Account (current balance US$6 million) for the purposes of paying reasonable and properly incurred operating expenses, however lenders have absolute discretion to approve or reject such request,” the Perth based company said.
“The lenders’ continued flexibility in relation to the Repayment Schedule is reflective of the ongoing support being afforded to the Company by its lenders. Discussions between Discovery Metals and various external parties as to a large-scale recapitalisation of the Company are continuing.”
Last month, Discovery Metals said it is retrenching 85 employees at the flagship Boseto mine out of a total staff complement of 516—a move which the company said will protect the on-going jobs of 85 percent of the workforce.
“This decision is one we sincerely regret, but ongoing improvements in the Boseto Operation’s efficiency and cost competiveness will assist with its long-term sustainability in the world copper market place,” Mokwena Morulane, Discovery Metals’ Country Manager – Botswana said at the time.
“Ultimately, the long-term sustainability of the Boseto Operation is in the best interests of our employees and local suppliers”.