Johannesburg — DIVERSIFIED metals producer Metorex said yesterday that it expected to have substantially reduced its R2,1bn debt by next month when its capital-raising programme comes to an end.
Metorex announced plans last month to raise R750m through a rights issue and implement a revised debt package at its flagship Ruashi copper and cobalt mining project in the Democratic Republic of Congo.
CEO Terence Goodlace said yesterday that the capital raising and the sale of noncore assets had substantially restored the balance sheet, with debt falling 29% from R2,1bn in June to R1,5bn. The company had moved from "survival mode" to growth, he said.
For the past year Metorex has focused on restoring its balance sheet and reputation, damaged by the crash in commodity prices, especially copper, and by liquidity problems. "Metorex has entered a new phase in its life and the group has rapidly advanced various recapitalisation, repositioning and refocusing initiatives over the past six months," Goodlace said.
"The recently announced capital raising, along with the disposals of Pan African in July and Vergenoeg in December, fundamentally changes and strengthens the balance sheet and places the company in a position to undertake project development.
"We are now actively advancing the completion of bankable feasibility studies for the Musonoi (Dilala East), Kinsenda and Lubembe deposits in Congo.
"Operationally, Ruashi has continued its positive trend, with quarterly copper production having increased 32,1% to 7 518 tons and cobalt 21,9% to 812 tons."
Metorex said the capital raising was set for completion by next month, but cash from the clawback amounting to about 78m was expected to be received next week. After the capital raising, overall debt would fall to R1,2bn.
Negotiations with Standard Bank had been completed and the revised Ruashi debt package was to be implemented this month.
Metorex revenue rose 141% to R1,4bn despite the 3900/ton Ruashi hedges. Adjusted headline earnings per share for the six months to December were 12c.
