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Austral Resources has announced that it has restructured its agreement with Glencore, Secover and Thiess, aimed at discharging all secured debt and extending the company’s mining operations. 

The four companies have entered into an agreement subject to conditions precedent to discharge all secured debt, by granting workout rights pursuant to the Anthill Project Agreement (APA).  

Austral Resources currently has $78 million in total secured debt. The company said that the APA structure is designed to ensure that Austral Resources is debt-free and risk-free with no operational exposure. 

Under the agreement, Austral Resources will retain the benefit of a portion of the free cash flow generated from Anthill once the secured debt has been repaid. 

The senior secured debt will be reduced by 100 per cent, decreasing from $78 million to zero. 

Austral Resources is seeking to raise equity of between $27 million to $35 million to repay unsecured debt to Thiess and fund working capital and accelerate its suite of expansion projects which, at Scoping Study levels, show the extended mine life.  

Austral said it will issue Thiess a convertible note in discharge of the balance of the remaining unsecured debt. The face value of this note is expected to be approximately $31.25 million. On completion of the transactions under the framework agreement, Thiess has agreed to the termination of the existing Mining Service Agreement without penalty. 

With increased financial stability, Austral Resources said that its focus will be to fast-track the recent scoping study into a definitive feasibility study with a projected timeline to start mining by June 2025. 

The company also said that the Heap Leach Re-Mine will provide another source of revenue on completion of mining Anthill.  

On satisfaction of the transactions contemplated under the framework agreement, Austral Resources is expected to be in a position to utilise its capital for the development of Lady Annie, Lady Colleen and Mt Clarke-Flying Horse which includes a maiden copper sulphide project.  

The company said that this strategic move and the development of the projects is expected to extend the mine life at its operations. 

Austral Resources’ Managing Director and CEO, Dan Jauncey, said, “This is the best position Austral Resources has been in in relation to a debt solution. With secured debt exposure reduced to nil, shareholder dilution non-existent for this piece and the capital structure simplified, the company is now positioned to attract renewed interest from quality investors and trade on a normalised basis as part of this restructure.” 

Mr Jauncey said that from an AR1 shareholder perspective, the debt restructure agreement is a significant and value creative event.  

“We will continue our focus on taking advantage of the favourable copper price environment and pursuing our growth strategy to create shareholder value through fast tracking our scoping study into a definitive feasibility study over the coming nine months. By ring-fencing the Anthill Project, we can now focus on expansion projects that will extend the company’s extended mine life.” 

Mr Jauncey said that the financial reset not only removes the weight of $78 million of secured debt but also sets the stage for a capital raise aimed at accelerating a list of expansion projects in the pipeline. 

“Alongside this financial restructuring, we will be reconstituting our Board to bring in fresh perspectives and expertise that aligns with our new strategic direction. Consistent with the messaging over the last twelve months, once the transactions under the framework agreement and Austral Resources are recapitalised, we will accelerate the search for a new CEO who will lead the company through this exciting new phase. 

“This period of transformation is a new era for Austral Resources, where we can leverage our strengthened financial position to extend mine life and unlock new opportunities. We look forward to updating the market as we continue to advance towards a financially sustainable future.” 

Image credit: Robyn Mackenzie/ 


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