Wednesday, May 25, 2022

DML gets reprieve from lenders as recapitalisation hits a snag

Discovery Metals has been granted another waiver by its lenders as the
company continues to look at ways to raise funds to clear debt and
recapitalise to keep its Botswana project alive.

The company, which owns Boseto mine outside Maun, is currently talking
to financiers to negotiate a term sheet for the re-profiling of the PF
Facility and Single Currency Revolving Facility Agreement (SCRFA).

DML said on at the beginning of the month that its lenders had granted
further waivers such that the scheduled repayment dates for the
principal payment of USD37.5 million and all interest owing up until
30 April 2014 on the Project Finance Facility (PF Facility) and all
amounts owing under the SCRFA had been deferred until 14 May 2014.

“Discovery Metals is pleased to announce that the lenders have granted
further waivers in relation to the principal and interest payments
owing under the PF Facility and all amounts owing under the SCRFA
until 30 May 2014,” the company said in an update to the market.
It further told shareholders that it is currently in discussions
directly with its lenders to negotiate a term sheet for the
re-profiling of the PF Facility and SCRFA.

“In line with those negotiations, Discovery Metals is pleased to
announce that the lenders have granted further waivers in relation to
the principal and interest payments owing under the PF Facility and
all amounts owing under the SCRFA until 30 May 2014,” it said.

“The company thanks its lenders for their support while discussions
for a binding term sheet for the re-profiling of the debt under the PF
Facility and the SCRFA continue.”

Earlier in the week, DML was dealt a blow when Montsant Partners
LLC ÔÇô which has entered into non conditional recapitalisation with
Discovery did not proceed with its proposal.

“Therefore, the conditions to the Recapitalisation Proposal have not
been satisfied and as a result, the conditional, non-binding term
sheet between the Company and Montsant is now at an end,” said the
Australian company.

Discovery announced a USD105 million recapitalisation proposal (pre
transaction costs) agreed with Montsant in April, which comprised a
share placement of 100 million new shares at AUD0.05 to raise AUD5
million to be completed in two tranches; and a convertible Notes –
USD100 million 10 percent p.a. interest rate, 5 year secured notes,
convertible to ordinary shares in the Company at AUD0.05 per share.

The proceeds of the deal were to be used USD65 million to discharge
obligations under existing debt facilities in full, USD40 million for
working capital purposes, including advancement of the Zeta
underground mine, and transaction costs.

“The agreements we have reached with Montsant Partners LLC and our
existing lenders is extremely positive for the Company as they reduce
our net debt on financial close to USD65 million and will provide
funding for the commencement of underground mining on the Zeta Mineral
Resource,”

Discovery Metals Chairman Jeremy Read, said at the time.
“The Montsant Partners LLC investment is a vote of confidence in the
long term potential of the Kalahari Copper Belt.”

RELATED STORIES

Read this week's paper