issue prospectus , page-4

Sigh .. at least quote the whole article ... their declaration of risk is a 'normal accounting procedure' ..

what are you tryin' to do ...


Nickel miner Mirabela hopeful of funding

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Sarah-Jane Tasker | March 06, 2009
Article from: The Australian

MIRABELA Nickel is likely to secure significant funds to complete its massive South American project despite indicating that there could be risks in finalising the capital.

Releasing its half-yearly results yesterday, the company warned that the continuation of the business was at risk because of a potential shortfall in funding.

The news shocked investors, who sent the stock down 6.45 per cent to $1.16.

But a source close to the company said the risk disclosure was a normal accounting procedure, and Mirabela was confident of raising the $US290 million -- through debt and equity -- needed to complete the Santa Rita nickel project in Brazil.

In a research note on the stock this week, Argonaut Securities described Mirabela as "a long-term value story" and said it was unfortunate that frozen credit markets and falling commodity prices had limited the availability of project funding and delayed the finalisation of Mirabela's senior debt package.

"However, the banks are still open for business for world-class assets," analyst Troy Irvin said.

"Very few mid-cap miners can lay claim to boasting a genuine tier 1 asset. Current levels present a unique opportunity to gain an inexpensive holding in a company that due to its low-cost structure can survive temporary low nickel prices, and print significant cash at normalised nickel prices."

The aspiring nickel miner has already secured a $US150 million loan and is expecting a further $US40 million to be finalised under the same facility.

The loan depends on the company raising no less than $US133 million -- or $US95 million if one of the lenders provides the additional $US40 million -- from an equity raising.

Mirabela has to complete the equity raising by a March 31 deadline.

One analyst said the company should not struggle to secure the entire funding needed because its project in South America was profitable, even at the spot price of nickel.

"The timing of the debt is unfortunate because it is a good project that will make money and a lot of people are interested in putting equity into this project," he said.

In its results statement yesterday, the company said the directors estimated that the $US290 million would satisfy repayment of a bridge financing loan, fund completion and commissioning of the Santa Rita project and meet working capital obligations.

"The directors have a reasonable expectation that the combined $US290 million senior loan and equity financing will be successful and thereby allow the company to fund settlement of current obligations and complete the Santa Rita Project," the company said in its statement.

Mirabela reported a net loss of $48.42 million for the six months to 31 December, from a profit of $9.75 million a year ago.

The company said it had a net working capital deficit of $55.434 million, with $13.049 million in cash and $1.422 million in trade receivables, less trade and other payables of $69.905 million.