Andromeda Metals gains credit approval for $75m Great White debt facility

A $75m debt facility will furnish Andromeda Metals with funding to support development of the Great White project.

Representing an endorsement of the project’s economic potential, the $75m debt facility brings ADN a step closer to a final investment decision. Pic: Getty Images

• Merricks Capital has approved a $75m debt facility for the Great White project after extensive due diligence

• The $75m includes principal, capitalised interest and fees, cash reserving requirements and a cost overrun tranche

• Facility tenor of 78 months, with amortisation beginning 12 months after project completion

Special Report: Merricks Capital has confirmed credit approval for a $75m debt facility to support development of the Great White kaolin project after closely examining the technical, financial, legal, market, environment and social aspects.

The debt facility is a key milestone that brings Andromeda Metals (ASX:ADN) closer towards achieving full funding for a final investment decision on the initial Stage1A+ development of its Great White project in South Australia.

The $75 million debt facility includes principal, capitalised interest and fees, cash reserving requirements and a cost overrun tranche.

Andromeda will have a 78-month tenor to repay the debt beginning after a 12-month grace period which will trigger once the project’s development is complete.

The facility will end at maturity with a 50% bullet repayment, with ADN paying a single lump sum at the end of the term.

The two companies will now finalise the binding financing documentation for the debt facility, ahead of execution and first drawdown.

The facility will be subject to the usual conditions for an agreement of this nature.

Andromeda continues to progress efforts to secure the balance of funding necessary to support a final investment decision to be made.

Endorsement of project quality

“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,” Andromeda Metals acting CEO Sarah Clarke said.

“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.”

ADN recently confirmed it had produced high purity alumina above a 4N grade of HPA (99.99%) to 99.9985% purity, using refined kaolin product from its Great White project.

That puts Great White kaolin in the 4N HPA purity rating, suitable for high-tech applications like lithium-ion batteries, LEDs, semiconductors and sapphire glass.

Importantly, Andromeda’s novel flowsheet sets it apart from other HPA producers, due to it being more cost and carbon effective than other reported processes.

One tonne of 4N HPA can sell for as much as US$15,000-25,000, as the critical mineral is highly sought after but until recently was prohibitively expensive to manufacture.

This article was developed in collaboration with Andromeda Metals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Andromeda Metals gains credit approval for $75m Great White debt facility