Genmin (ASX:GEN) has negotiated an unsecured loan of US$2 million to provide working capital for its Baniaka Iron Ore Project in the Republic of Gabon, Central Africa.
The emerging iron ore producer says the unsecured loan has been provided by its largest shareholder, Tembo Capital Mining Fund.
The loan must be repaid in cash on or before 31 March 2024, although under the terms of the loan, Genmin must immediately pay it back in full upon becoming entitled to draw down on any debt financing raised to fund the development of Baniaka.
Interest for the loan will accrue at 10% per annum and will be capitalised quarterly, to the extent not paid in cash on or prior to the end of each calendar quarter. Meanwhile, interest on overdue amounts will accrue at 12% per annum and may be capitalised monthly. The company says discussions are ongoing for an additional, non-dilutive US$5 million in royalty funding.
Genmin also reports it has applied for a mining permit for an initial term of 20 years to support a ‘large-scale’ mining operation at Baniaka. During the first part of 2023, the company says ‘significant’ progress has been made on procuring the mining permit by submitting an ‘extensive’ application to the Minister of Mines and Geology.
This application is subject to the approval of a social and environmental impact assessment (SEIA), which has been submitted to the Gabon Director General for the Environment and the Protection of Nature (DGEPN).
The company reports the SEIA is now subject to a final assessment by the DGEPN and is expected to be approved by the end of the June 2023 quarter through the issue of a certificate of environmental conformance.
Commenting on the loan and applications, Genmin Chief Executive Officer (CEO) and Managing Director Joe Ariti says: “Our focus during the first part of 2023 has remained steadfast on targeting production at Baniaka in the second half of 2024.
Not only have we signed long-term agreements for the provision of clean, renewable electricity, and rail and port services, we have made solid progress on procuring a large-scale mining permit, with the most challenging piece related to the social and environmental impact assessment largely behind us.
“Not only have we signed long-term agreements for the provision of clean, renewable electricity, and rail and port services, we have made solid progress on procuring a large-scale mining permit…”
In addition, the company has been prudent and responsible managing its capital structure in not raising working capital at these artificially low equity prices by putting in place an unsecured, non-dilutive US$2 million loan financing, with its supportive, largest shareholder, Tembo Capital.”
Genmin is an emerging iron ore producer focused on its 3 projects covering about 5,064km-square in the Republic of Gabon, Central Africa. The company’s flagship Baniaka and the nearby Bakoumba iron ore projects lie in the southeast region of Gabon, near the capital city of Franceville.
Along with Baniaka and Bakoumba, Genmin also holds an exploration tenure prospective for iron ore, gold, and base metals at its Bitam Iron Ore Project in the northwest region of Gabon.
Write to Harry Mulholland at Mining.com.au
Images: Genmin Ltd
