Gulf Manganese Corporation (ASX: GMC) is back on track to complete construction of the Kupang smelting hub in Indonesia’s West Timor after clinching a €52 million (A$84.5 million) loan facility.
The smelting specialist today announced it has inked a binding term sheet to establish the facility with Glacier International Depository, Legal and General Investment Management and HSBC Bank.
Proceeds are expected to be received by the end of January.
The company has been constructing a ferro-manganese processing hub at Kupang in West Timor but has struggled to secure finance to take the project to completion.
In an investor presentation released in mid-November, Gulf said construction was more than 60% complete with commissioning and first commercial alloy sales anticipated during the first quarter of 2020.
However, Gulf still needed about US$13 million (A$18.9 million) to complete the first two smelting furnaces.
The company was suspended from the ASX’s official quotation on December 18 and requested a voluntary suspension extension on Christmas Eve.
Following today’s announcement confirming the loan facility, the company has now been reinstated.
The new loan facility will now enable Gulf to fully fund the construction and commissioning of the first two smelters at the hub, with completion and the pouring of first metal expected in the third quarter of 2020.
Gulf said the loan also provides it with the ability to ramp-up its high-grade manganese mining and exploration activities in Indonesia, taking advantage of its licence to export manganese direct shipping ore.
In addition, it will allow the company to advance its strategic joint venture with Iron Fortune in Timor-Leste.
“We now have ample capacity to fast-track high-impact mining and exploration programs targeting Indonesia’s abundance of high-grade manganese ore deposits,” Gulf managing director Hamish Bohannan said.
He thanked the company’s principal contractors XRAM and PT Weltes, as well as shareholders, for their patience and support during the refinancing process and “what has been a challenging 12 months”.
“We look forward to delivering a number of highly value accretive milestones in the near-term and even more significantly over the longer term,” Mr Bohannan said.
“This is a transformational step for Gulf and we are now firmly on the road to becoming a leading global ultra-low carbon ferromanganese producer this year,” Gulf chairman Craig Munro added.