+++++++++++++++++++++++++ * Macquarie Bank and Standard Bank London to provide project financing facility of up to A$52 million
* Based on current capital estimates and debt facilities no additional equity is required to develop Project
* Limited nickel hedging ensures Company maintains significant upside to higher nickel price
* Statutory approvals are the only outstanding item now to commencing Project construction
* Based on prompt receipt of Statutory Approvals the Project remains on track for first shipment of concentrate in March 2004 which is only 12 months away
A$52 MILLION PROJECT FINANCING FACILITY
Sally Malay Mining Limited (ASX:SMY) is delighted to announce that it has accepted an offer from Macquarie Bank Limited ("Macquarie") and Standard Bank London Limited ("Standard") for a loan facility (the "Facility") of up to $52 million to develop the Sally Malay Project .
The major features of the Facility are as follows:
* Total funds of up to A$52 million will be available via a combination of a Project Development facility and a Cost Overrun facility, together the "Facility";
* Based on the current capital estimate for the SAG Mill flowsheet and working capital estimates the Facility together with subordinated debt facility from the concentrate customer (Jinchuan/Sino) should provide sufficient funds for the Company to develop the Project without requiring additional equity from shareholders;
* Credit approval has already been obtained from both banks' credit departments;
* The Facility requires a limited volume of nickel hedging to be undertaken prior to Facility drawdown which represents less than 15% of the total nickel in the Sally Malay resource; and
* There are only a small number of conditions precedent remaining to be satisfied prior to Facility drawdown;
The Company and the banks will now commence detailed Facility documentation which should take 4-6 weeks to complete.
COMMENTARY
Macquarie and Standard's willingness to provide this A$52 million Facility is a strong indication of the robustness of the Sally Malay Project and the Company is delighted to have these banks as partners in the Sally Malay Project. The Company can now move forward with the Project development knowing that it has access to sufficient funds to complete construction and commissioning of the Kimberley's first nickel mine, unlocking the value of the Sally Malay deposit for our shareholders and other stakeholders.
Macquarie and Standard are very experienced in resource banking with a proven track record and ongoing commitment to the mining industry. The banks have dedicated metals and mining divisions and base metal trading capacities and are Associate Broker Clearing Members of The London Metals Exchange. The banks have an excellent knowledge of the base metals markets and have provided project financings for a large number of base metals projects in Australia and overseas. They will make excellent partners for the Company and we look forward to working with them to develop a successful Project.
The Company would also like to take this opportunity to thank the other financial institutions that submitted term sheets for the provision of this loan facility.
SALLY MALAY PROJECT UPDATE
With the Project financing now secured the Company's Sally Malay nickel-copper-cobalt Project in the East Kimberley of Western Australia is only one step away for construction commencing. The one outstanding item is receipt of statutory approvals from the WA Government which the Company hopes is imminent.
Assuming Statutory Approvals are received during April 2003 the Project timetable is as follows:
UPDATED DEVELOPMENT TIMETABLE
Statutory Approvals April 2003 Project Financing available for drawdown May 2003 Plant construction commences April 2003 Plant commissioning commences January 2004 First Concentrate shipment March 2004
P Harold MANAGING DIRECTOR
For further information contact: Peter Harold Keith Liddell MANAGING DIRECTOR EXECUTIVE CHAIRMAN