Energy Resources of Australia (ERA) will drawdown its $100 million loan with Rio Tinto in full just days before the facility was set to expire.
ERA entered into an agreement with Rio in October 2022, whereby a revised credit facility was installed with a maturity date of March 31, 2023.
The purpose of the credit facility was to support ERA through the rehabilitation of the Ranger uranium project as it determined a future funding solution, which has yet to be finalised.
A funding solution has advanced, with an interim entitlement offer the only feasible option available for ERA. The company said it was “having discussions with shareholders” and was in the process of finalising the offer, including size and price.
ERA has been on a journey to finance its Ranger clean-up job.
In February 2022, the company announced it had added $600 million to Ranger’s rehabilitation cost, increasing the bill from $1.6 billion to $2.2 billion. The price outlined in the 2019 Ranger closure feasibility study was $973 million.
This coincided with a Ranger reforecast exercise to identify the best path forward for the mine. This saw ERA factor in additional costs and scheduled impacts in converting Ranger’s tailings storage facility into a water storage facility.
ERA also extended the timeline for Ranger’s clean-up to between the fourth quarter of 2027 and the fourth quarter of 2028, having previously indicated rehabilitation would be completed by January 2026.
In June 2022, ERA announced that it was seeking an “urgent interim funding” solution given its cash on hand position. This is when the company first announced its intention to launch an interim entitlement offer, but nine months on, an offer has yet to emerge.
ERA ceased activities at Ranger in January 2021 after four decades of operation. The mine produced in excess of 132,000 tonnes of uranium oxide across its life cycle.
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