Improving metal prices provides light at the end of the tunnel for OZ Minerals
While a critical banking syndicate has yet to respond to troubled big Australian miner OZ Minerals the company today indicated there were some better signs in its survival quest.
Author: Ross Louthean
Posted: Monday , 12 Jan 2009
PERTH -
mineweb.com
Chief executive of OZ Minerals Ltd (ASX: OZL), Andrew Michelmore, said in a statement to the Australian Securities Industry that the banking syndicate involved in its Facility A group loan had not, as yet, responded to a bridging loan request that was required by February 9.
However, this syndicate has said it will respond "as soon as possible."
This appears to be the most critical of a series of hurdles OZ Minerals is facing over the need to refinance about $A1 billion ($US million) in loans that went pear shaped with the global banking crisis and a stuka dive in the company's critical package of minerals - zinc-lead-silver and nickel.
Michelmore also said today that OZ Minerals was working "constructively" with Societe Generale on the Facility C, in seeking an extension of this facility to February 27. To achieve accord on this Society Generale agreed to the extension on the basis it must be granted security over certain Australian assets to January 14.
OZ Minerals also paid $US12.6 M due to lenders in Facility D that fell due on Decembr 31.
While OZ Minerals is still in on thin ice, there are signs the company may now be seeing the ice looking less brittle through some metal prices climbing off their bottoms.
Michelmore said that as of last Thursday the company's cash balance was $A132 M ($US91.4M) after having been at $A179.2 M ($US124 M) on December 23. However, that cash balance had declined further to $A109.3 M ($US75.7M) on December 30 "and has subsequently increased."
"We have made significant progress with the Facility A lenders regarding the provision of a bridging finance facility", Michelmore said.
"And we look forward to advising further progress in our refinancing negotiations as soon as possible."
"The improvement in the rate at which we are consuming cash reflects better commodity prices, and some very early benefits of the cost-cutting programme we have previously advised to the market", Michelmore added.
One project requiring more capital is the Prominent Hill copper-gold project in South Australia (one of the assets acquired with the company's merger as Zinifex Ld with Oxiana Ltd), as this is now moving towards commissioning but is unlikely to provide a relevant cash flow for six months.
Prominent Hill and the Martabe gold project in Indonesia (also a debt-funded Oxiana asset) are two of the company's projects on the auction block. Media reports and company comments have indicated Martabe could be a straight sale, while Prominent Hill could be a sale or joint venture. |
