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MDL

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$1.75 mineral deposits limited

Ann: 3Q 2016 Operations Review-MDL.AX, page-22

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15/12/16

15:53

Post #: 21366839
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Joint venture funding

As announced (ASX Releases: 11 December 2015, 21 January 2016), a number of amendments to the TiZir Bond Agreement were approved at a meeting of Bondholders in December 2015. One of the conditions in reaching an agreement with Bondholders was that MDL and ERAMET establish a $60 million committed facility in favour of TiZir ($30 million from each of ERAMET and MDL) for the payment of interest and principal under the bond issue. The entire $60 million facility is to be underwritten by ERAMET. Any funding provided by ERAMET on behalf of MDL in relation to both the abovementioned $60 million committed facility and other funding facilities as required by TiZir in the normal course of business is catered for under the terms of the Shareholders’ Agreement entered into by the joint venture partners upon establishment of TiZir in September 2011 and subsequent Deeds of Amendment. In accordance with the above, ERAMET provided funding of $8.5 million to TiZir on behalf of the Company ($6.2 million under the terms of the $60 million committed facility and $2.3 million under the terms of other operational financing facilities) in order to fund both operational and financing cash flows of the joint venture. In April 2016, MDL repaid $4.0 million (raised through the disposal of its interest in WTR as outlined above) of the outstanding amount. The total outstanding balance (including accrued interest) at 30 June 2016 was $7.2 million. Should MDL not repay this amount by 31 December 2016, ERAMET will have the option to increase its share of the joint venture. Any dilution of MDL, if applicable, would take place based on a formula that calculates the equity value of TiZir using valuations contained in the most recent TiZir balance sheet.

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MDL Price at posting: 42.0¢ Sentiment: None Disclosure: Not Held
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