Tiomin thinking further about Kwale (January 12, 2007)

Faced with delays that may prevent it from meeting financing conditions, Tiomin Resources (TIO-T) is “reviewing options” for the development of the Kwale mineral sands project on the east coast of Kenya.

Delays in administrative requirements and a last-ditch attempt by seven local landholders to stop a government-authorized expropriation set Kwale’s schedule too far behind to meet a February deadline to begin drawing down the debt financing for the project. Some of the administrative items have been completed, and the court action by the landholders was dismissed, but a withholding tax agreement with the government and a final mineral lease, modified to include all land needed for the project, are still under negotiation.

The delays have coincided with a decline in the value of the United States and Canadian dollars against a number of other currencies, which has affected the project cost. Tiomin has sought a review of the budget and schedule from its principal project contractor, Ausenco, and expects to have it in two weeks.