Shanghai Pudong Development Bank extends the maturity period by one year of a $200 million USD loan for working capital purposes related to the Karara Iron Ore Project (Linked to Record ID#96993)

Project narrative

In April 2016, Shanghai Pudong Development Bank (SPDB) entered into a $200 million USD (RMB 1,325,000,000) bank loan facility agreement with Karara Mining Limited (KML or 卡拉拉矿业公司 or 卡拉拉矿业有限公司) — a special purpose vehicle (SPV) and joint venture of Australian mining company Gindalbie Metals Limited (47.84% equity stake) and Angang Group Investment (Australia) Pty Ltd (a wholly owned subsidiary of Chinese state-owned steel-maker and iron ore miner Anshan Iron & Steel Group Corporation (Ansteel)) (52.16% equity stake) — for working capital purposes related to the Karara Iron Ore Project. This loan carried a maturity period of 35 months (2.916 years) and a final maturity date of March 25, 2019. This loan carried an interest rate of 3-month LIBOR plus a margin of 1.15% and had a quarterly repayment schedule. Ansteel issued a guarantee for this facility and Gindalbie issued a limited recourse counter guarantee limited to Gindalbie's shares in KML. Record ID#96993 captures the original loan. This loan was fully drawn down in April 2016. As of December 31, 2018, funds under this facility were still outstanding for repayment. By March 2019, SPDB had extended the maturity period of this loan by one year (to 3.916 years), with the new maturity date falling on March 25, 2020. Record ID#96995 captures the extension. The Karara Iron Ore Project (KIOP), which sought to construct and operate a magnetite mining and processing operation located in the Mid-West region of Western Australia, located approximately 225 kilometers east-southeast of Geraldton and 320 kilometers north-northeast of Perth. It consisted of an open cut mining pit, a beneficiation processing plant, a waste rock dump (WRD), tailings storage facilities (TSF), rail loading facilities, accommodation facilities, an airstrip, and a Linear Infrastructure Corridor (LIC) containing a water pipeline and access road. Stage 1 of KIOP sought was to be construct infrastructure to produce 3 million tons per annum of hematite and 8 millions tons per annum of magnetite concentrate, to be sold by Ansteel for its 6.5 million tons per annum Bayuquan steel mill in China. The Karara mine contained approximately 1.4 billion metric tons of recoverable reserves and over two billion tons of estimated reserves, with an estimated 60-year lifespan at an initial production rate of 8 million tons per annum. In addition to the mine, the KIOP consisted of the following supporting infrastructure: a 80-kilometer Karara rail spur, connecting KIOP to the common-user rail system at Tilley Siding, near Morawa; a 180-kilometer long 330 kV powerline from Eneabba to Karara, connecting the project site to Western Australia's South West power grid; a 145-kilometer water pipeline, supplying process water from a bore field near Mingenew to Karara; and the Karara Export Terminal (KET) at the Port of Geraldton, with a capacity of 16 million tons per annum of magnetite concentrate or hematite direct shipping, consisting of a dedicated fourth railway line inside the port, a twin-car rotary dumper (train unloader), a 297-meter long storage facility with a 255,000 tons capacity, a dedicated berth, Berth 7, capable of accommodating Panamax vessels; and a 5,000 ton-per-hour ship-loader. The ground-breaking ceremony and the start of construction began on November 2009. The Karara Export Terminal officially opened on September 18, 2012. The project first produced magnetite concentrate in November 2012. The project was officially opened in April 2013. The project first produced 68% Fe concentrate were later in August 2013.