Van Dieman Mines has agreed a new one year GB£6.75 million financing arrangement with the Galena Special Situations Master Fund Limited to allow it to progress its two tin projects in Tasmania. Galena will in turn receive loan notes which can be converted into a stake of up to 83.55% in VDM. Galena is part of the Trafigura trading group and Trafigura has also obtained an exclusive offtake agreement for VDM concentrates. The new agreement supercedes several previous deals under which Galena would have taken a substantial minority stake in the AIM-listed miner.
Mike Etheridge, Non-Executive Chairman, commented: “The board appreciates the support of all shareholders, but with additional cash requirements at a time of turmoil in global credit and equity markets and simultaneously being on the cusp of our first tin concentrate production from the Scotia mine in Tasmania, we feel very appreciative of the additional support afforded the company by Galena”.
The Scotia project is due to start up around the turn of the year, but, due to uncertainties about grades and other issues, early production will be regarded as “trial mining”, following which the mine plan will be finalized. Full production is not expected to be achieved until the second quarter of 2009 and start-up of the Endurance project will not now commence until Q3 2009. In original mine plans the two projects had a projected combined capacity of 1,300 – 1,500 tpy.
