Merricks Capital has granted credit approval for a A$75m ($48.7m) debt facility to support the development of Andromeda Metals’ Great White project in South Australia.
The debt facility includes principal, capitalised interest, fees, cash reserving requirements and a cost overrun tranche.
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The tenor of the facility spans 78 months, with a 12-month grace period post-development completion before scheduled amortisation begins, culminating in a 50% bullet repayment at maturity.
The Great White project boasts Tier 1 asset status in South Australia, with all key approvals for construction commencement in place.
With a 28-year mine life, the project is expected to produce 330,000 tonnes per annum (tpa) of refined kaolin products.
It has secured 100% offtake coverage for Stage 1A+ and completed a bankable feasibility study showing strong project economics.
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By GlobalDataThe project features various high-value deposits containing a naturally occurring blend of halloysite tubes and kaolinite plates. It is located within the District Council of Streaky Bay, near the community of Poochera on the Eyre Peninsula in South Australia.
The credit approval follows Merricks Capital’s extensive due diligence on the project’s environmental, financial, legal, market, social and technical aspects.
Andromeda Metals and Merricks Capital are now finalising the binding financing documentation, leading to execution and first drawdown.
The completion of the financial close is contingent upon customary conditions precedent including securing the balance of funding necessary for a final investment decision for the project’s Stage 1A+ development.
The terms of the facility entail a comprehensive senior security package over the project’s assets and rights, with the facility being drawn down in stages.
Interest is payable on the amounts drawn, with an undrawn line fee on undrawn funds during the availability period.
After the 12-month grace period, a fixed repayment schedule is set, with a 50% bullet payment at maturity.
Merricks Capital will also be issued 400,000,000 equity warrants, subject to financial close and shareholder approvals, with an exercise price at a 10% premium to the price paid for any shares issued as part of the development funding.
Andromeda Metals acting CEO Sarah Clarke said: “Receiving confirmation from Merricks Capital that the proposed facility is credit approved, following extensive due diligence, represents a significant milestone in the financing of Stage 1A+ of the Great White Project. This outcome is a strong endorsement of the project’s quality and a testament to the team’s dedication, expertise and commitment to delivering an investment ready project.
“With this momentum, we continue to pursue the balance of funding opportunities to support a final investment decision, with due diligence continuing with a select number of capital providers.”
In addition to the Great White project, Andromeda Metals acquired a 51% interest in the Eyre Kaolin joint venture in July 2024.
