Petropavlovsk PLC shareholders voted March 11 in favor of guaranteeing associate IRC Ltd.'s debt related to its flagship K&S iron ore project in Russia's Far East.
The Russia-focused gold miner's shareholders voted 84.22% in favor of backing two new "broadly identical" facilities with Russian state-owned Gazprombank, versus 15.78% votes against.
IRC, in which Petropavlovsk holds a 31.1% stake, secured the dual-tranche US$240 million facility with Gazprombank in December 2018 to refinance subsidiary Kimkano-Sutarsky Mining and Beneficiation Plant LLC's outstanding project finance facility with Industrial and Commercial Bank of China and to repay loans from Petropavlovsk.
"The repayment schedule of the new facility with Gazprombank better aligns with the proposed ramp up of K&S's production and the anticipated revenues IRC will generate as a result," Petropavlovsk Chairman Roderic Lyne said.
He added that the company will benefit from a US$63 million aggregate cash inflow through IRC's settlement of two bridge loans and a guarantee fee.
In June 2018, Petropavlovsk made IRC a US$29.75 million bridge loan to pay down its line of credit from Industrial and Commercial Bank of China.