UK-based mining company Red Rock Resources said it signed an agreement to take control of a 17% stake in local company Steemlin in exchange for financing the refurbishment and recommissioning of a ferrosilicon smelter in Jajce, in Bosnia and Herzegovina.
Red Rock has borrowed a total of $4.23 million (5.1 million euro) from a group of investors in the form of a 12-month security promissory note, with an additional term of eight months available on 25% of the principal, the company said in a statement on Thursday.
The first repayment of $507,156 has already been made to the investors, Red Rock said.
“Steelmin continues to progress on schedule towards production, and European ferrosilicon prices have further improved. The strengthening of sterling against the dollar since we took out the loan, and the slight improvement of the Euro against sterling, have benefitted both sides of our back to back facility. We expect significant dividend and royalty inflows in the remainder of calendar 2017 to enable us to continue paying down our loan after this first substantial payment,” the president of Red Rock, Andrew Bell, said in the statement.
The ferrosilicon and silicon metal smelter complex in Jajce, in central Bosnia, was shuttered in 2004 due to increasing exports pressure from Chinese producers. Steelmin acquired it in 2011 and plans to restart ferrosilicon production in the first quarter of 2018.