I guess even though terms are agreed for the funding it takes an unreasonable amount of time to get the final contract and security documents sorted.
It will be interesting to learn all the details and what form the loans take and what security the lenders end up with.
We are a bit different to the average miner in that the SA government has a first mortgage over all our assets to secure the rehabilitation obligations.
That may need to be rearranged to give the lenders the comfort. they need.
For any of the newcomers interested in the back story and a bit of trivia. Before the near death experience, towards the end of that long bull run in the cu price, in 2016 HGO had cash on deposit with a bank as collateral for a bank guarantee, to secure the rehabilitation obligations, which is common practice throughout the industry. With the copper price falling like a stone the Hedging Contracts HGO had , I guess, to satisfy their lenders, were worth more that the debt. So they backed out the hedges and repaid the debt which freed up all the assets. The SA government recognised the gravity of HGO's financial position and took a first mortgage over all the assets, loaned HGO $4m and released the bank guarantees which gave us access to the cash on deposit.
Since then there has been a new development in Queensland in relation to securing rehabilitation obligations.
A short while ago the Queensland Treasury developed an insurance based product for miners to secure their rehab. obligations. The Insurance scheme allows approved miners to pay an insurance premium equal to the bank guarantee fee which bypasses the bank and releases the cash for working capital needs. You wouldn't expect a government to be so innovative and risk tolerant. But there you go.
Maybe we could access that scheme or convince the SA Government to adopt it.
HGO Price at posting:
7.2¢ Sentiment: None Disclosure: Held
