Base Resources Limited (LON:BSE ASX:BSE) expects to repay most of a US$20mln loan facility with major shareholder Taurus by September after the recent rise in the price of ilmenite.
The miner has extended the repayment date for the unsecured facility with Taurus Funds Management by nine months to end September 2017.
Base said the extension removes any need to raise money externally to repay the facility at the end of December.
The rise in ilmenite prices recently and better outlook for rutile, another widely used industrial metal, means it should have largely paid off the US$17.3mln currently outstanding by next September, it added.
In return for the debt extension, Taurus has received shares that increase its equity stake to 15.5% (from 14.3%) while the amount of any surplus cash (cash sweep) at the Kwale operation in Kenya that must go to paying back the loan rises to 75% from 50%.
Hiuse broker RFC Ambrian adds that at the end of September total net debt stood at US$147mln, comprising US$175m of project debt and US$17mln payable to Taurus, an amount offset by US$45mln of cash of which US$22mln is restricted.
Net debt would have been reduced by a further US$17mln to US$130mln if a shipment of rutile had been received in the September quarter rather than December.
Buy is RFC Ambrian’s rating with a target price of A$0.30 (18.6p).
Shares were 11.5p.
-- update for broker comment --