TSX: MNB, ASX:MBN
Ordinary shares outstanding: 129,791,100
PERTH, Australia, Oct. 29 /CNW/ - Mirabela Nickel Limited (TSX: MNB, ASX:
MBN) would like to update the market as to progress in completing the
syndication of the US$280m in senior debt underwritten by Credit Suisse and
Mirabela intended to complete syndication by early December 2008. Due to
the uncertain credit markets, this syndication process is now delayed by
approximately 2 months.
The Company has received the following feedback from preliminary debt
- Santa Rita is considered a particularly high quality Project, capable
of attracting finance even in a difficult market.
- There is strong interest in the syndication. Credit is available for
quality projects at the right price.
- The syndication is best delayed by 2 months to allow credit and
commodity markets to stabilise. Also, some banks have a preference
for new credits to be approved in the new year.
- The price of new credit (i.e. interest rate) needs to reflect higher
costs of funds and financing risk perceptions.
The Company has taken the following action to help ensure that the
syndication is successfully completed:
- The capital cost of the project has been reduced by US$40m. This
represents reduced expenditure on drilling and exploration work
(which has already defined sufficient resources for a mine life of
20 years), the proposed port upgrade, and other support facilities
and services which are non-essential to commencement of production.
- As a result, the senior debt requirement is reduced to US$240m, of
which US$80m is already drawn under the bridge facility provided by
Credit Suisse and Barclays.
- The Santa Rita financial model for the syndication is being updated
for the full ramp up to 6.4mtpa (previously 4.6mtpa) and for the
latest capital costs, operating costs and exchange rates. The
financial model demonstrates strong viability even at low nickel
prices. At a nickel price of US$5lb, the Project generates about
US$90m pa profit after tax over the payback period (before allowance
for debt and interest). At current exchange rates (R2.20), the cash
costs after credits are below US$2.40lb of payable nickel. The
Project benefits from the hedging of 37.5m lb of nickel at US$8lb and
20m lb of copper at US$2.73lb.
- An updated mining reserve is due to be announced shortly. This new
reserve is being included in the financial model and demonstrates an
open-pit reserve life of almost 20 years.
The Company presently has cash reserves and available facilities of
approximately US$70m and is continuing with the construction of the Project.
The Project is now about 65% complete with clear visibility on the remaining
costs and completion schedule, and remains on track for commissioning in mid
The Company looks forward to completing the senior debt syndication
process early next year.
Nick Poll Craig Burton
Managing Director Corporate Director
Mirabela Nickel Ltd owns 100% of the world class Santa Rita nickel
sulphide project and is listed on the Australian and Toronto stock exchanges.
With a JORC Indicated open-cut resource of 130mt grading 0.60% Ni for 780,000t
of contained Ni, Santa Rita is the largest nickel sulphide discovery
world-wide in the last 12 years.
Construction of a 6.4 mtpa nickel sulphide concentrator commenced in
November 2007 and is currently 65% complete. The plant will produce 18,500 tpa
of nickel in a sulphide concentrate from one open-cut mine starting from mid
2009 increasing to 27,000 tpa by mid 2010. At this rate of production the
project will have a mine life of at least 20 years.
Photos of the construction progress are available on the Company website
Caution Regarding Forward Looking Statements: The forward-looking
statements made in this news release are based on assumptions and judgments of
management regarding future events and results. Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any anticipated future results, performance or
achievements expressed or implied by such forward-looking statements.
For further information:
For further information: Australia contact: Nick Poll or Craig Burton,
Telephone: +61 8 9324 1177, firstname.lastname@example.org, email@example.com;
Australia contact (media): Caroline de Mori, Purple Communications, Telephone:
+61 8 9485 1254, firstname.lastname@example.org; Toronto contact (media): Eric Tang,
Porter Novelli, Telephone: (416) 422-7200, email@example.com