Non-binding term sheet signed for US$25M debt facility
This morning, our fertiliser and green ammonia/hydrogen Investment Minbos Resources (ASX:MNB) made more progress towards financing the development of its Angolan fertiliser & green ammonia/hydrogen projects.
In addition to a $25M capital raise, MNB also confirmed that a non-binding term sheet had been signed for a $25M debt facility.
The term sheet was signed with the same group of investors who cornerstoned the capital raise for a total of $15M (syndicate of investors led by the chairman of the world’s largest battery anode producer).
The term sheet is non-binding meaning the debt facility hasn’t been put in place as yet, this just means that MNB have interest from a group of financiers and should the company wish to take out the facility they can go back and negotiate a final agreement with them.
The specifics of the term sheet are set out in the announcement as follows:
- Facility size: US$25 million available in tranches of US$5 million
- Term: 5 years
- Interest rate: Market interest rates with potential equity participation
- Use of proceeds: CAPEX for MNB’s phosphate (fertiliser) project.
- Conditions: MNB needs to complete a DFS, secure offtake agreements and the financiers have a right to complete due diligence.
The significance of this term sheet is that it encompasses most of the CAPEX requirements that MNB had estimated in its 2020 scoping study.
The 2020 scoping study had estimated that MNB’s phosphate (fertiliser) project could be put into production at a low upfront CAPEX cost of only US$22-28M.
Given that the debt facility covers US$25M and potential equity participation in the future, MNB now have a non-binding commitment from a group of investors.
With the non-binding term sheet backstopping its project, MNB confirmed in today’s announcement that MNB that a DFS is to be delivered and construction expected to begin Q3-2022.
