5 September 2008 Manager Announcements Company Announcements Office ASX Limited Level 4 20 Bridge Street SYDNEY NSW 2000
The directors of India Resources Limited (Company) are pleased to advise that the Company has secured a working capital debt facility of $1.5 million from the Hong Kong based global supply chain manager, Noble Group. The facility is designed to provide sufficient working capital for the Company as it focuses on the ramp up to sustainable production levels at the Surda copper mine in India. The debt facility can be drawn down in instalments as required and is repayable within 18 months, with repayments being funded from forecast cash operating surpluses generated from the Surda copper mine. The facility has been provided on normal commercial terms and is secured by a fixed and floating charge over the Company. Production rates at the Surda project continue to increase in line with forecasts and the project is on target to reach full production levels during September 2008. This will signify a major milestone for the Company with Surda expected to achieve a cash operating surplus before capital requirements. The grade of the copper in concentrate being produced at Surda remains excellent and marginally above previous forecasts. The Company is also in the final stages of a feasibility study for an additional decline between the two primary shafts at Surda with an aim to doubling production within the next two years, and to the Company’s ultimate production target of 900,000 tonnes (9,000 tonnes of copper in concentrate). At their request, a preliminary proposal has also been submitted to Hindustan Copper Limited (HCL) for the proposed expansion at Surda, however final terms have not been agreed and this may take some time to complete. Notwithstanding this, a favourable outcome is anticipated as the project has clear benefits for both parties. The benefit for HCL is the increasing replacement of imported ore to the Moubhandar smelter, which lies 5 kms to the east of the Surda mine and for the Company, a significant positive impact on production rates and mine profitability. The existing contract with HCL expires in 2014, however a cornerstone to the proposed expansion will be the extension of this agreement.
IRL Price at posting:
5.6¢ Sentiment: None Disclosure: Held
