CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION 8. Investment in joint venture (continued) Facility 1 – Government Debt Facilities (Northern Australia Infrastructure Facility) On 4 October 2022, KMS’ wholly owned subsidiary, Thunderbird Operations Pty Ltd (TOPL) entered into a Facility Agreement with the Northern Australia Infrastructure Facility (NAIF) for $160m inclusive of a term loan and cost overrun facility. The facility is secured against TOPL’s assets. Loan – The facility comprises of $120m debt facility (Facility A) and a $40m cost overrun facility (Facility B). – Interest charged at a base rate based upon the Commonwealth Government Security cost plus a margin of 3.5% which increases to 8% from year 6 onwards. Interest is payable quarterly in arrears. – Principal repayments for Facility A are made in line with the repayment schedule commencing 31 December 2027 with the final payment made 31 December 2033. – Principal repayments for Facility B are required to be paid in advance of Facility A, prior to 31 December 2027. As at 30 June 2024, both facilities of $160m were fully drawn. Total interest paid for the year was $8.4m (2023: $2.3m). Facility 2 – Production Linked Loan Facility (Orion Mineral Royalty Fund) On 30 September 2022, KMS and TOPL entered into a Production Linked Loan Agreement with OMFR (Th) LLC, a related entity of Orion Mineral Royalty Fund (Orion) for US$110m. The facility comprises of US$110m debt facility and a production linked royalty. The facility is secured against TOPL’s assets. Loan – Interest is charged at a margin of 5% plus the higher of a) adjusted term SOFR, and b) 2% per annum. – Principal repayments are made in line with the repayment schedule commencing 30 June 2025 with the final payment made 31 December 2028. Royalty – Quarterly payments commence at the earliest of a) full repayment of the loan or b) 7 years following the date of the loan agreement. – Royalty payment is 1.60% of FOB gross revenue for the period. Revenue is based upon the quantity, type and price of the commodity extracted. The royalty payment is limited to Stage 1 production capacity capped at an annual production rate of 8.2m tonnes of ore. – The repayment term is 25 years and is subject to a buyback provision curtailing the term to 12.5 years. As at 30 June 2024, the facility of US$110m was fully drawn. Total interest paid for the year was US$11.2m/A$16.9m (2023: US$3.4m/A$4.9m). Debt Covenant The following financial covenants apply to all KMS secured debt facilities which are tested on a semi-annual basis. KMS has complied with all financial covenants. Compliance ratios: – Loan Life Cover Ratio is greater than 1.20:1 – Project Life Cover Ratio greater than 1.50:1 – Reserve Tail Ratio is greater than 20% – Debt Service Cover Ratio is greater than 1.10:1 57 Sheffield Resources Limited Annual Report 2024
RkJQdWJsaXNoZXIy MjE2NDg3