Kaboko Mining secures long-term debt facility

Zambia-based Kaboko Mining has secured a 10-yearrock crusher distributors in denver colorado manganese ore off-take agreement and US$10 million 30-month secured prepayment debt facility with Noble Resources.

The company said this is a major milestone in advancing its Zambian manganese projects.

Kaboko’s executive director, Jason Brewer, said: “The signing of the off-take agreement and execution of loan documentation for the US$10 million prepayment facility with Noble represents a further milestone for the company in its plans to become an established and profitable high-grade manganese ore mining and exploration company.

“Attracting such an established and strategic industry group as Noble to both invest in our business and to enter into a long term off-take agreement is a major step forward for the company and our shareholders, and is also testament to the quality and potential of our Zambian manganese projects. We are very pleased that we have been able to attract such a successful group as Noble to invest in the growth of our company at such an early stage and we look forward to working with them.”

The transaction is considered by the board to be a major step forward for Noble Resources. The proceeds of the US$10 million prepayment facility will be used to complete further exploration and to advance its Zambian manganese projects towards full-scale commercial production of a high-grade and high-quality export manganese ore product.

The facility is to be advanced in two tranches upon satisfaction of a number of conditions precedent and subsequent to an initial advance of US$0.5 million already received by the company, which is subject to a number of conditions including shareholder approval and ASX waivers in respect to the transaction.

A second advance of US$5.5 million is forecast by the company to be drawn down later this quarter, upon satisfaction of a number of conditions precedent and final sign off by Noble. These conditions include, among others, execution of documentation in respect to the transportation and export of manganese ore from the company’s projects and an advance of US$4.0 million upon delivery by the company of 105 000 t of manganese ore under the 10-year manganese ore off-take agreement.

Under the terms of the off-take agreement, the company will deliver to Noble approximately 180 000 DMT per year of a minimum 48% manganese lump ore from the company’s Zambian manganese projects. These deliveries will take place on a quarterly basis over an initial 10-year term. The total amount of manganese ore to be delivered under the agreement will be no less than 1.68 million DMT of manganese ore from the Zambian manganese projects.

The company anticipates the first exports under the off-take agreement to commence in the fourth quarter of 2012 with CIF deliveries to ports in India, China and the Middle East, or other ports as agreed by the parties.

Production from the Emmanuel, Peco and Kanona projects is proposed to be the primary source of high-grade manganese ore product to be delivered into the agreement with Noble. Exploration and resource definition drilling, as well as further mine optimisation studies are currently underway at these projects.