Aim-listed gold miner Shanta Gold has received irrevocable undertakings from the majority of holders of the company’s outstanding unsecured subordinated convertible loan notes that are due in April 2019, to buy back some of those loan notes and to extend the maturity date of the remainder of the loan notes.
Shanta will buy back $5-million of the $15-million of loan notes held by third parties, at their original maturity date in April 2019, while the maturity of the remaining loan notes has been extended to April 2020.
Seventy-six per cent of loan note holders provided irrevocable undertakings in favour of the arrangements.
Shanta plans to buy 33.3% of the loan notes currently held by third parties, at par, through a subsidiary Shamba, and to extend the maturity of the loan notes to April 2020.
The company is in a period of rapid deleveraging, and is on course to repay $30-million of gross debt to its lenders over the next 18 months, including this $5-million buy back of loan notes.
The Shanta board, therefore, considers it prudent to take this opportunity to reduce the cash call in April 2019 and extend the maturity of the loan notes to April 2020.
The arrangements will provide the company with increased flexibility to develop the Ilunga prospect, conduct exploration at the New Luiki gold mine, in the Lupa goldfield, south-west Tanzania, as well as to identify targets close to the mine.
The Shanta board considers the arrangements a positive outcome, resulting in reduced overall indebtedness of the company, with no associated fees.