MEDIA RELEASE
2 October 2007
PMA APPOINTS MERRILL LYNCH FOR DEBT FINANCING
PMA has appointed leading
financier Merrill Lynch (Asia Pacific) Limited (“Merrill Lynch”) to
arrange debt financing of approximately A$200 million for its flagship Windimurra
vanadium project in WA’s Mid West.
The financing will
complete funding arrangements for the Windimurra vanadium project without
diluting equity for shareholders. The project is expected to commence
production in the second half of 2008.
PMA Chairman
Michael Kiernan said this was an important milestone and a further vote of
confidence for the Windimurra project.
The Board considered
a number of proposals from international banking groups, and after
comprehensive analysis, was pleased to appoint Merrill Lynch.
PMA believes
Merrill Lynch has superior marketing and distribution capability, a strong
presence in Australia
and good relationships with long term investors.
PMA considers that
completion of funding by year end is achievable because of Merrill
Lynch’s detailed knowledge of the Windimurra project.
“Merrill
Lynch has invested in similar projects recently where it has been mandated as
arranger and this track record was a factor in the Board’s
selection” Mr Kiernan said.
“The
appointment of Merrill Lynch to assist in this debt financing is another
significant step forward for this world class project,” Mr. Kiernan said.
Windimurra, located
600km north east of Perth,
is based on one of the largest proven vanadium reserves in the world. Global
demand for vanadium is expanding, driven by growth
in steel consumption, increasing intensity of vanadium use in developing
economies and expanding use of vanadium-titanium alloy in aerospace
applications.
Windimurra is an outstanding project
which has the potential to make PMA one of the world’s lowest cost
vanadium producers. Windimurra has made considerable progress toward
production, with major infrastructure components secured and marketing
arrangement in place.
In addition, the company has
announced a significant increase in reserves, the appointment of key senior
staff and the negotiation of critical service contracts are at an advanced
stage.
“We have also added
considerable skills and experience to our Board and management, and when
funding is complete, are well-placed to take this project into production and generate
value for our shareholders,” Mr Kiernan said.
For further enquiries call:
Dr Iain Scott Warrick
Hazeldine
Managing Director Purple
Communications
Tel: +61 (0) 8 9423
1900 Tel
+61 (0) 8 9485 1254
Mob:
0417 944 616
Background
Precious Metals
Australia (PMA) is a ferro-alloys company based in Perth, Western Australia and
is listed on the Australian Stock Exchange (ASX:PMA). PMA’s focus is the
development of the Windimurra Vanadium Mine, located 600km north east of Perth in WA’s
Mid-West region.
PMA has a strategic
alliance and off-take agreement with leading global supply chain manager, Noble
Group Limited, based in Hong Kong. Noble has
agreed to purchase the total vanadium output of the Windimurra mine, at
prevailing market prices for the life of the mine.
Originally
discovered by PMA in 1985, Windimurra contains one of the largest reported
proven vanadium Ore Reserves in the world with current mineable reserves of 98.2
million tonnes at a bulk grade of 0.40% V205 (vanadium
pentoxide), which will underpin an initial mine life of 25 years at the
proposed mining rate of 3.9mtpa. A total of 148 million tonnes of resources
have been modelled at a bulk grade of 0.46%.
The Windimurra mine
was originally built by PMA with a joint venture partner in 1999, and, whilst
operating, was the world’s largest primary vanadium mine, gaining
recognition as one of the highest-quality sources of vanadium in the world
market.
Since 2003, world
demand for vanadium and the price of the commodity have increased strongly,
largely driven by growth in Chinese steel production. Marketing studies
commissioned by PMA forecast that vanadium demand will continue to increase
through 2015 at a compound annual growth rate of 7.8%.
For more information, please visit www.pmal.com.au
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