Most of the net proceeds from the placing will be used to meet Tri-Star’s share of additional shareholder investment into Strategic & Precious Metal Processing (SPMP), an Omani company in which Tri-Star has a 40% equity interest. SPMP is constructing an antimony and gold processing facility in the Sohar Freezone of the Sultanate of Oman.
Tri-Star said SPMP had recently achieved a number of critical milestones in the construction of the project.
Plant construction is now 97% complete, main grid power is connected and cold commissioning is well underway. Hot commissioning will commence later this month leading to the production of antimony trioxide followed by the production of antimony and gold ingot later this summer.
Another key milestone achieved in the last quarter was the development of valuable relationships with international feedstock and other raw material suppliers, Tri-Star said.
SPMP is expecting to receive initial revenues from the sale of products produced in the commissioning phase during the next quarter with its first significant revenues expected to arise in the final quarter of the year as production is ramped up; however, during the commissioning phase, the project will require further short-term operational and working capital financing and it is seeking around US$30mln from its shareholders to cover this, hence Tri-Star’s plans to raise fresh fund.
The balance of the net proceeds from the placing will be applied to pay down part of the secured loan notes held by various funds operated by Odey Asset Management.
Shares in Tri-Star currently trade at around 41p.