Standard Bank London and the Standard Bank of South Africa have sold their interests in certain senior finance documents, including a senior credit agreement with
In late October, Standard Bank notified Thistle that it had defaulted on debt repayment; the notice of default has been withdrawn under the latest agreement.
Thistle says Meridian plans to negotiate a recapitalization but that a successful restructuring cannot be assured. Meridian retains all the rights of a lender under the senior finance documents.
In early October, Thistle started production at the Minkie Block of the Eldorado Massives zone, part of the President Steyn gold mine in South Africa. The company also said it had begun installing trackless, remote-controlled loading equipment in an attempt to more than triple production to 250 tonnes per day.
Says Thistle Mining President William McLucas: “This is an important step in the plan to return the business in South Africa to profitability through the extraction of greater tonnages of higher-grade ore.”
Thistle admitted in its second-quarter financial results that its cash resources were “insufficient to finance the operations beyond the very near term, in the absence of improved mining results and significantly more favourable exchange rates.” The company cited the strength of the South African rand and the underperformance of its mining operations as contributing factors.
During the three months ended June 30, Thistle lost US$12.2 million (or 3 per share) on revenue of US$18 million, compared with a year-earlier loss of US$4.4 million (2 per share) on US$19.3 million.
Thistle’s second-quarter gold sales amounted to 41,268 oz., down from 45,930 oz. in the same quarter last year. The decrease reflects a change in the mine plan, which saw mining discontinued at several low-grade areas. The change did boost the company’s recovered grade to 4.4 grams gold per tonne, from 4 grams in the first quarter.
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