Andrada Mining has reached financial close on N$98 million in funding from Bank Windhoek and the Development Bank of Namibia for the expansion of its Uis Mine, clearing the final financing conditions for a project expected to increase tin concentrate production by up to 70%.
The financing was conditionally approved in May, but Andrada said its subsidiary, Uis Tin Mining Company, has now executed the definitive agreements for the two N$49 million loan facilities and satisfied all conditions required by the lenders.
Drawdown is expected within five to 10 days, completing the funding required for the operational upgrades and allowing the company to move the ore-sorting expansion fully into execution.
The project is expected to increase tin concentrate production at Uis from about 1 800 tonnes per annum to between 2 500 and 3 000 tonnes, equivalent to between 1 500 and 1 900 tonnes of contained tin annually.
Andrada chief executive officer Anthony Viljoen said reaching financial close with the two Namibian financial institutions had reduced the funding risk associated with delivering the expansion.
“The strengthening of the collaboration with two of Namibia’s leading financial institutions, has enabled Andrada to complete the funding required to materially de-risk the delivery of the Uis ore-sorting expansion,” Viljoen said.
“The Company can now continue to move decisively into project execution mode to further unlock the mine’s operational and cash-generating potential through increased throughput and processing efficiency.”
Bank Windhoek and DBN are providing the N$98 million equally through separate N$49 million facilities, both with a 10-year tenure.
The funding will finance construction and commissioning of a modular ore-sorting circuit at Uis, together with upgrades to the existing crushing and screening sections of the processing plant.
The ore sorter will pre-concentrate run-of-mine ore before it enters the existing processing circuits, effectively increasing the tin concentration in the material being processed. The accompanying crushing and screening upgrades are intended to remove existing bottlenecks, increase throughput and improve overall processing efficiency.
Andrada has already appointed the contractors responsible for delivering the project, meaning physical execution has started while the company prepares to draw down the financing.
Intagrey, which specialises in modular ore-sorting plants, will fabricate, construct and commission the ore-sorting circuit, while Consulmet Africa will carry out the upgrades to the crushing and screening sections.
Equipment fabrication is already underway, with the project scheduled to move through site construction and installation, completion of the crushing and screening upgrades, commissioning and finally ramp-up.
“The appointment of two well-known engineering firms to fabricate and execute on this project, has enabled the early work required, to meet the project delivery timelines,” Viljoen said.
The financial close converts what was previously conditional funding into executable loan facilities.
Andrada announced on 27 May that Bank Windhoek and DBN had conditionally approved the N$98 million financing package, subject to the company meeting conditions before the money could be disbursed. The latest announcement confirms those requirements have now been satisfied and the definitive documentation signed.
Although the two lenders are providing equal amounts and both facilities run for 10 years, their initial repayment arrangements differ.
Under the Bank Windhoek facility, Andrada will make interest-only quarterly payments during the first four quarters after drawdown, then move to equal quarterly repayments covering capital and accrued interest for the remaining 36 instalments.
The DBN facility provides greater relief during the first year, with no quarterly capital or interest repayments required during the first four quarters. Equal quarterly repayments of capital and accrued interest will then apply for the remaining 36 instalments.
Bank Windhoek’s facility carries interest at the Namibian prime lending rate, which Andrada currently puts at 10%, plus two percentage points, while DBN’s facility is priced at prime plus 1.95 percentage points.
Both facilities rank as senior secured debt alongside Andrada’s other senior secured lenders and are supported by a joint general notarial bond over movable assets totalling N$98 million.
With the financing conditions now cleared, Andrada’s focus shifts to delivering the plant upgrades and achieving the projected production increase at Uis, with the company expecting the ore-sorting circuit to lift tin concentrate output by between 50% and 70%.
