'announcement was positive, but surely not a big news..'It was...

'announcement was positive, but surely not a big news..'

It was big news from a risk POV. It removes a serious risk that most would have been aware of - of not starting Phase 2 and producing at X % , and Y cost by 19th Oct as per LYC reports.

This was a 'default' event under the Sojitz deal, and likewise a kickon event for Mt Kellett.

LYC had to give away a little to secure this deal; Early repayment schedule with first payments as soon as Jan 2014 and early final payment, and extended phase 1 production run

In addition they have negotiated a possible get out clause on the Lamp 1 trigger event by having an option to pay an additional $35m should they fail to achieve the production volume and cash OPEX costs by March 2015. Good to have some expectation of costs without another round of negotiations on this matter.

All told a good deal under the impending issues fast approaching.

Not sure if Mt Kellett can renegotiate as their bonds are now payable after the final payment to Sojitz, unlike the original deal.

The Sojitz loan remains at 5.25% plus LIBOR.

The other point to note that any CR / borrowings for more than $80m would cause the Sojitz loan repayments to accelerate - also a new restriction, and again Mt Kellett may have some wriggle room to negotiate on this point.

Also to note the Mt Kellett interest rate was always listed at 2.75%, but there is this wording in the accounts that suggests the effective rate is a tad over 8% - interesting deal the Mt K boys have penned.