Off-take ageements with fixed price 35% above spot market signed
Mannheim/Toronto. Almonty Industries announced today that it received a letter of commitment from an industry participant with respect to the funding of the equity component of the overall financing package needed to bring the Sangdong Mine into production. It will be provided by an industry participant by way of a loan financing. As a result, the mine will essentially be 100% debt financed without dilution of shareholders. The same industry participant will also purchase 100% of the concentrate produced in Sangdong. An off-take agreement will be finalized shortly. Deutsche Rohstoff directly holds 12.58% of Almonty´s share capital and in addition two convertible bonds that will increase its stake to 19.58% in case they will be fully exercised.
In order to fulfill the prerequisites for the financing, Almonty repaid a C$ 6.5 million loan from the Korean TaeguTec Ltd. that was due as at December 31, 2016 early. TaeguTec subsequently released all security it held over Sangdong.
Almonty also announced that it has entered into several 1-year fixed price off-take. The net price to be received under the contract is US$210 per MTU of contained tungsten, equating to an effective APT price of US$269 per MTU (assuming an industry average discount factor). The current average spot market price of APT is approximately US$200 per MTU, meaning Almonty will receive a price 35% above spot market.
Thomas Gutschlag, CEO of Deutsche Rohstoff, noted: “Our investment exposure in Almonty represents by far our largest position in the metals and mining industry. We believe that the company is on a very good track after today´s news. Despite the still challenging market environment, the management team is consequently implementing its strategy to become the most important producer of tungsten concentrate outside China.”
Mannheim, 28 November 2016
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