Significant progress is being made in relation to Kingsrose Minings financial arrangements and operations at the Way Linggo Gold project in Indonesia, according to the companys Administrators, Michael Ryan and Ian Francis of FTI Consulting.
The Administrators have renegotiated the terms of Kingroses debt facilities. The company owes secured lenders Michael John Andrews (MJA), Great Golden Investment Ltd (GGIL) and Beurama Pty Ltd a total of A$9.6 million comprising outstanding principal and interest. GGIL and Beurama are entities controlled by former director Bill Phillips.
These agreements are conditional on Kingsrose raising no less than US$4 million through an equity raising or alternative debt arrangements, with at least US$1 million being by way of equity (or a convertible loan) within three months.
Under the revised agreements, MJA (A$2.25 million) and GGIL (A$2.94 million) have agreed to convert their debt to equity as part of a broader equity raising. The price at which the debt will convert to equity will be the weighted average price of shares that Kingsrose agrees to issue under the equity raising.
Conversion of the debt to equity is conditional on any necessary shareholder approvals and the simultaneous conversion of any convertible loan forming part of the additional funding.
Beaurama (A$4.4 million) has agreed to release the existing security it has over the shares in the entity which holds Kingsroses interest in the Way Linggo project. It has also agreed that no further interest will accrue in relation to the Beaurama debt until July 2020.
From July 2020, Beaurama has agreed to reduce the interest rate from 10.5% per annum to 5% which Kingsrose will pay monthly in arrears. To the extent it has not been repaid earlier, the Beaurama debt will be deferred to a single payment due on November 30, 2023.
Meantime, consultants Mining One has reviewed the remnant resource at the original Way Linggo mine. A plan has been developed to recover part of this resource via an open cut mine. It is proposed that the open pit to exploit this near-surface remnant ore, above Level 1 of the underground workings, will be mined in four phases. Approvals have been obtained to commence work on the first phase, known as the Trench One Pit, immediately.
The life of mine plan for Talang Santo is being finalised and while this is being completed, operations are continuing, albeit at a reduced rate, at least for the short term, producing between 500800 ounces of gold a month at an average grade of 6.7 g/t.
At present, it is anticipated that changes to the mine plan and capital infrastructure will allow access to the lower levels of the ore body sooner than originally scheduled.