Straits shareholders approve name change and new game plans

PERTH (miningweekly.com) – The shareholders of ASX-listed Straits Resources on Tuesday approved a name change, debt restructure, and the admittance of a new strategic partner.

Now trading as Aeris Resources, the company would focus on a two-pronged growth strategy, the first of which was investing in near-mine exploration to advance a pipeline of known prospects within its landholding in the Tritton copper region to leverage off existing infrastructure at the Tritton operations, which included a 1.6-mllion tonne a year processing plant.

The second focus would be on pursuing appropriate merger and acquisition opportunities with the support of its new strategic partner Special Portfolio V.

“Over the past three years we have made some difficult but necessary decisions and worked diligently to turn the business around,” said Aeris executive chairperson Andre Labuschagne.

“We have divested the majority of the company’s non-core assets, exited our Indonesian operations, reduced corporate overheads and focused on returning the Tritton operations to reliable production and positive cash flows.

“With a strengthened financial outlook, we believe it is appropriate to start the next chapter under a new brand,” Labuschagne added.

Meanwhile, Aeris shareholders also approved the restructure of the company’s debt, under which the $111-million outstanding debt to lender Standard Chartered Bank (SCB) would be reduced by more than 50% to $50-million through a new senior debt facility with SCB.

The new seven-year facility would include a two-year up-front cash interest holiday.

As part of the restructuring, SCB would be issued with redeemable convertible preference shares equivalent to 60% of Aeris’ post-restructuring fully diluted equity. The two companies also agreed a price participation structure whereby SCB will receive a small percentage of incremental revenue above a copper price of A$8 000/t.

As part of the restructuring, Special Portfolio V would provide $25-million in a three-year revolving priority debt facility for working capital and growth projects at Straits’ Tritton copper operations, in New South Wales.
The new partner would also be issued with convertible preference shares with a five-year term, convertible to ordinary shares in Straits equivalent to 15% of the company’s post-restructuring fully diluted equity.