Metro boosts coffers as expansion advances

Metro Mining has lined up a funding package of about $20 million to support Bauxite Hills mine during the wet season and enable completion of the expansion project at that site. The funding package consists of a royalty deal with Nebari and a short-term working capital facility with Lambhill. It comes after Tropical Cyclone Jasper caused a significant disruption to operations at the far north Queensland site during December, with the suspension of transhipping activities for 10 days. Upon resumption, ongoing adverse weather limited shipping operations until season end on January 4, Metro said. The reduction of loading capacity resulted in the cancellation of two vessels and the short-loading of another four vessels. Metro said several staff and their families were personally impacted by the weather event as well, however, measures had been put in place to provide short and long term support. "The one-off impact on cash flow from the cyclone coincides with critical wet season maintenance and delivery of remaining expansion elements," the company stated. "Therefore, Metro has bolstered its cash position with a $20 million funding package combining a royalty and a short-term working capital facility provided by existing lenders and shareholders. "Further, Nebari has elected to exercise 40 per cent of its tranche 1 warrants it received as part of the senior debt package in 2023." Metro said outputs in early December demonstrated the 7.0 million WMT per annum expansion rate being targeted for 2024. Despite the significant impact of Tropical Cyclone Jasper, positive quarterly margins of A$7 /WMT were achieved. The capital budget for the Bauxite Hills expansion project (taking output to 7.0 M WMT) at FID last May was set at $31.9 million. Metro said a revised budget had been approved by the Board of Directors since the end of 2023 to accommodate additional costs. The current forecast cost at completion is now $36.1 million; a 13 per cent overrun. The major components attributable to the cost overrun are: $1.1 million on the screen circuit due to scope changes and detailed design; $1.7 million for Ikamba towage due to market conditions, fuel, weather delays and route change to Darwin; $0.9 million due to Ikamba dry-dock extension of scope and time; $1.3 million in project management, operational readiness, critical spares, net of contingency; $1.4 million in foreign exchange movements vs US$ offset by $0.8 million in positive savings.

Metro boosts coffers as expansion advances

Industry Queensland

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