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Mozambique Mining & Finance: Beacon Hill making progress with new debt facility, debt restructuring

Beacon Hill subsidiary Minas Moatize Limitada (MML) had started the process of applying for the renewal of its mining concession, which would expire in June next year
Beacon Hill subsidiary Minas Moatize Limitada (MML) had started the process of applying for the renewal of its mining concession, which would expire in June next year

Beacon Hill Resources was making steady progress with regard to a new debt facility for the Minas Moatize coking coal mine expansion project, in Tete, Mozambique, and the restructuring of existing group debt facilities, CEO Rowan Karstel said on Tuesday.

He added that he remained optimistic that Beacon Hill would be able to deliver some resolution for its shareholders before the end of the year.

“The Minas Moatize coking coal mine is one of the very few globally that can sustain operations in this challenging price market if we complete the proposed expansion to 3.2-million tons a year,” he said.

Beacon Hill had submitted its final revised legal due diligence report to a South African development finance institution (DFI) to be reviewed, with final approvals expected by the end of the year.

Further, the company had also reached an agreement with Vitol South Africa to defer principal and interest on the $10-million senior debt facility provided to Beacon Hill, pending the completion of the new debt facility.

Amortisation of $1.7-million due September 30 had already been deferred during this year, with Beacon Hill having agreed to further defer this amount and a further $2.4-million due December 31, to January 30, by which time the company expected to have completed either a restructuring or refinancing of the Vitol senior debt facility.

In addition, Beacon Hill had elected to capitalise interest payments for the time being to conserve cash within the group. The total capitalised balance outstanding to Vitol was $10.56-million carried forward.

“The successful restructuring of the Vitol senior debt facility will likely be a key condition precedent to the drawdown of any new DFI senior facility in 2015,” Beacon Hill said.

Further, in addition to negotiations with Vitol and the DFI, the company had continued negotiations with all existing convertible loan note holders regarding a potential restructuring of $14.8-million in loan notes currently due for redemption between July 2015 and July 2018.

The company stated that the successful restructuring of the convertible loan notes would likely also be a key condition precedent to the drawdown of any new DFI senior facility in 2015.

Meanwhile, Beacon Hill subsidiary Minas Moatize Limitada (MML) had started the process of applying for the renewal of its mining concession, which would expire in June next year, for a further 20 years.

The company said that, on the basis of MML’s 25-year mining contract with the Mozambique government, Beacon Hill expected a timely renewal of the mining concession.(By Miningweekly)

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