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Strandline mandates Nedbank to arrange US$26M facility for Fungoni project


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Strandline mandates Nedbank to arrange US$26M facility for Fungoni project

Strandline Resources Ltd. mandated Nedbank Ltd. to act as a lead arranger and underwriter for a US$26 million, five-year finance facility for the company's Fungoni heavy mineral sands project in Tanzania, the company said Jan. 3.

The facility will account for the majority of Fungoni's total estimated development costs of about US$32.1 million.

In November, an updated definitive feasibility study pegged an after-tax net present value of US$30.8 million at a 10% discount rate and an internal rate of return of 42.1%.

The company will repay the loan on a quarterly basis 21 months after financial close, plus additional sweep of available cashflow under certain circumstances.

The facility remains conditional upon documentation and satisfactory completion of due diligence, targeted for completion by the end of the March quarter.

Nedbank CIB has already kicked off the detailed due diligence process.

The facility supports Strandline's position to commercialize its first project in Tanzania and capitalize on the growing mineral sands market.

Fungoni will also pave the way for development and capital appreciation of the company's other mineral sands projects in Tanzania and Australia, including the large scale Tajiri ilmenite and Coburn zircon projects, Strandline added.