Metro Mining (ASX:MMI) has secured a funding package of circa $20 million to support operations during the wet season and enable completion of the expansion project at its Bauxite Hills Mine.
The $87.31 million market capitalisation company says funds will be used to strengthen its balance sheet in the aftermath of Tropical Cyclone Jasper — the wettest tropical cyclone in Australian history — which affected Far North Queensland and Metro’s Bauxite Hills Mine.
The funding package consists of a royalty and a short-term working capital facility. The financing package has been negotiated with senior lender Nebari Natural Resources Credit Fund and junior lender Lambhill in order to provide the capex required to complete the expansion and the funds to ensure all other wet season maintenance is completed and operations are able to ramp up rapidly.
Meanwhile, Metro today (30 January 2024) released its latest quarterly report, noting it achieved a further quarterly production record of 1.7 million wet metric tonnes (WMT) en route to achieving market guidance for the year, shipping 4.61 million WMT for the season by 4 January 2024.
CEO Simon Wensley says it was pleasing to meet sales guidance and see the strong production in Q4 right up to when Cyclone Jasper interrupted progress.
“The rates achieved are strong indicators of delivering 6 and 7 million WMT in 2024. The incremental funding provided by Nebari and Lambhill underlines the collective confidence in Metro’s plans and provides the balance sheet strength and flexibility to deliver on the 2024 targets.”
Outputs in early December demonstrated the 7 million WMT per annum expansion rate targeted for 2024 and despite the significant impact of Tropical Cyclone Jasper, positive quarterly margins of A$7/WMT were achieved. Increased bauxite prices and new offtake contract signed Traded bauxite market conditions were robust with incremental increases in USD prices.
Metro’s equivalent prices were down slightly vs last quarter due to the exchange rate however still up 9% year-on-year.
A new offtake contract with Shandong Lubei Haisheng Biotechnology Co. Ltd was signed during the quarter for up to 900,000 WMT in 2024 with prices negotiated quarterly, taking total 2024 offtake contracts to 6.8 million WMT.
Metro says the impacts and recovery funding associated with Tropical Cyclone Jasper Tropical Cyclone Jasper caused a significant disruption to site operations during December, with the suspension of transhipping activities for 10 days. Upon resumption, ongoing adverse weather limited shipping operations until season-end on 4 January 2024.
The reduction of loading capacity resulted in the cancellation of two vessels and the short-loading of another four vessels. Unfortunately, several Metro staff and their families were personally affected, however, measures have been put in place to provide short and long term support.
The one-off impact on cash flow from the cyclone coincides with critical wet season maintenance and delivery of remaining expansion elements. Therefore, Metro has bolstered its cash position with the aforementioned $20 million funding package combining a royalty and a short-term working capital facility provided by existing lenders and shareholders.
Further, Nebari Natural Resources Credit Fund has elected to exercise 40% of its tranche one warrants received as part of the senior debt package in 2023.
Expansion project on track The wobbler feeder circuit manufacture progressed and installation will occur in Q1 2024 with commissioning expected by the end of March.
Metro notes the Offshore Floating Terminal, Ikamba, was named and departed Shenzhen, China at the end of the quarter with its arrival in Australia expected in early February 2024. Following regulatory approvals, the vessel is expected to be preparing for operations by the end of March.
At the end of the December quarter, Metro’s cash at hand was A$12.1 million. In terms of its senior secured debt facilities, at the end of the quarter, Metro had one fully drawn secured debt facility totalling US$30 million.
The company also had two fully drawn secured debt facilities totalling A$35 million.
Metro Mining is a miner and explorer based in Brisbane, Queensland. The company’s flagship Bauxite Mine sits in Far North Queensland about 95km north of Weipa on Western Cape York.
Bauxite is the ore used to make aluminium, a critical and strong growth metal in the energy transition.
Write to Adam Drought at Mining.com.au
Images: Metro Mining
