Paringa Resources accepted a committed letter of offer from Macquarie Bank to provide a fully underwritten five-year $20 million project loan facility (PLF) to develop the Poplar Grove Mine.
Macquarie will also provide a $1.7 million letter of credit facility to allow Paringa to collateralize environmental and other bonding obligations required for the construction and operation of the Poplar Grove mine.
The key terms of the PLF are typical of a facility of this nature, including a floating interest rate comprising the three month LIBOR plus a margin of 10.5% pa during construction, falling to a 9.5% margin for the remainder of the loan.
The facility can be repaid at the end of any quarterly interest period, throughout the term of the loan, without penalty.
In consideration for the provision of this underwritten offer, Paringa will issue Macquarie 4.4 million options with an exercise price of A$0.66, being a 20% premium to the 30-day volume weighted average share price of Paringa, and expiring four years from their date of issue. Paringa will issue a further 4.4 million options on the same terms upon drawdown.