Hey John,
Thanks for the reply, I'm travelling overseas but was going to try to setup a Skype call with the company to get clarification on this.
The second question I was going to ask them was about the Deutsche Bank $60mil revolving credit facility.
From the 2019 Annual Report:
In June 2016, LHM entered into a US$25,000,000 24-month Revolving Credit Facility, which was subsequently reduced to US$20,000,000 in September 2016. The provider of the Revolving Credit Facility was Nedbank Limited (Nedbank), through its UK registered subsidiary, N.B.S.A. Limited. At 30 June 2017 the Company had drawn US$20,000,000 under this facility. The facility was repayable on 9 June 2018 and bore interest at LIBOR plus 5.17%.
On 21 July 2017, Paladin entered into agreements with Deutsche Bank to refinance the Nedbank Revolving Credit Facility and fund working capital for LHM and the Paladin Group. Under the agreements Deutsche Bank acquired the existing Nedbank Revolving Credit Facility and increased the size of the facility from US$20,000,000 to US$60,000,000. Under the terms of the Deutsche Bank Facility, LHM drew down US$45,000,000 for its working capital (including the US$20,000,000 already drawn) and Paladin and Paladin Finance Pty Ltd (PFPL) drew down US$15,000,000.
Paladin and PFPL are jointly and severally liable for the entire facility and LHM is only liable for the amounts drawn down. The entire facility is guaranteed by Paladin and PFPL. The term of the Deutsche Bank Facility was 12 months. Additional security has been given to that provided under the Nedbank Revolving Credit Facility.
On 1 February 2018, as part of the effectuation of the DOCA, approximately US$60,000,000 of the cash raised from the issue of senior secured notes was used to acquire the Deutsche Bank Facility.
(All money below is in US currency)
So PDN had drawn down the total US$60mil revolving credit facility in 2017.
Part of the DOCA process was that PDN were issued with US$115mil in new notes.
US$63,834,000 of the $115mil was paid immediately to Deutsche Bank, to pay down the revolving credit facility.
So I'm assuming PDN still have a $60mil revolving credit facility??
Although this expires next year on 21/07/18.
I'm trying to figure out PDN's cash position looking forward.
- PDN have stated they now have $120mil in current debt, I'm assuming the extra $5mil has come from interested added from the new $115mil notes?
The new notes (including interest) are due on 23/03/23 for a total amount of $185,000,000.
- PDN said in their latest presentation that they have $50mil in cash but $11mil of that is restricted for rehabilitation services so that just leaves $39mil.
- PDN have $14Mil p.a. ongoing cost.
- So that leaves $25mil by say mid next year, this is the same time that the 12 month revolving credit facility will finish.
-This doesn't include spend for optimisation/restart studies I might add which would be a few $million in themselves .
The restart of LHM has been said to cost around $35-$45mil alone, maybe more.
Also the US$93,300,000 interest bearing loan will need to be repaid at some point in the future.
So looking forward, PDN are most likely going to need to do a credit raise within the next 9 months..?
What are your thoughts about when PDN would consider turning LHM back on or if they plan to?
They haven't come out with a Uranium price number yet, before they consider turning LHM back on.
I was thinking $50-$55+ minimum to be worth it.
I'm assuming they don't want to go back into administration incase Uranium price does go down for whatever reason again.
Orr maybe they do with how the DOCA process went last time...?
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