Emerging tungsten producer King Island Scheelite (ASX: KIS) has confirmed an additional $33 million loan to advance the redevelopment of its Dolphin tungsten project in Tasmania.
A group of four of the company’s major shareholders, together with an external financier, have agreed to provide the debt funding, subject to the satisfaction of financing conditions.
King Island executive chairman Johann Jacobs said this new support was an important step on the company’s pathway to achieving financial close for the Dolphin project.
“The company remains confident in targeting financial close for the project in the next two months,” he said.
This new funding adds to the $10 million loan that King Island is currently renegotiating to receive from the Tasmanian Government.
A further $10 million leasing facility on mobile equipment is also being negotiated.
The parties providing the latest debt facilities include Abex Limited, Chrysalis Investments, DACHS Capital AG, Elphinstone Holdings and PURE Asset Management.
The facilities are repayable between three and up to six years after drawdown and are at annual interest rates varying between 6.5-8.25%.
Shareholder approval for the facilities will be sought at King Island’s annual general meeting scheduled for October.
In addition to this approval and the finalisation of terms, security and warrant documentation, a key financing condition is that King Island achieves financial close for the project with further funding of at least $20 million.
Other loan facilities
King Island is currently renegotiating certain aspects of the $10 million Tasmanian government loan it announced in February.
The company said these renegotiations are necessary to accommodate the other debt facilities.
King Island also intends to fund its mobile mining fleet through a leasing arrangement with a specialist leasing company. Talks with this party are ongoing with the company anticipating a agreement will be reached within the next month.
At Dolphin, King Island aims to redevelop a historical tungsten mine that closed in 1990. The Dolphin deposit is estimated to hold 2.9 million tonnes of probable reserves at 0.73% tungsten oxide, including an underground reserve of 1.5Mt at 1.24% tungsten oxide.
At full production, the project is forecast to produce 3,100t per annum of tungsten trioxide concentrate.