Richland Resources extends loan facility as it pursues Capricorn sale

Australian sapphire producer and gemstones developer Richland Resources announced a further extension of its £0.4m and $0.15m secured convertible loan facility to 31 May on Wednesday, as it updated the market on its strategy around its wholly-owned subsidiary, Capricorn Sapphire, which owns the Capricorn sapphire mine in Queensland.

The AIM-traded firm confirmed it had agreed and executed a fifth addendum to its pre-existing convertible loan facility, which was originally announced on 25 June last year and most recently updated on 1 April, to further extend the facility maturity date from 30 April to 31 May, with all other terms unchanged.

As it had announced on 28 September, the first addendum to the convertible loan facility involved an increase in the principal amount from £0.3m to £0.4m, with the second addendum announced on 31 December involving an extension of the term of the convertible loan note to 28 February.

The third addendum announced on 28 February extended its term to 31 March, and the fourth addendum announced on 1 April involved an extension of its term to 30 April and an increase in the principal amount of $0.15m.

On the subject of its strategy, Richland noted that on 28 September it announced that it was engaged in discussions with potential strategic investors to procure sufficient funding to enable the restart of production at the Capricorn sapphire mine, or alternatively would seek to conclude ongoing negotiations with different parties in relation to the potential sale of all or a part of Capricorn Sapphire.

“Further to [our] announcements on 31 December and 2 April, the board is now focussed on pursuing the sale of all or part of Capricorn Sapphire and remains in discussions, with one party in particular, with regard to the potential sale of the entire Capricorn Sapphire project,” the board confirmed in its statement.

“There can, however, be no guarantee that the company will be able to either secure the requisite funding to be able to re-commence operations or conclude discussions with regard to the potential disposal of Capricorn Sapphire.”

Richland Resources said a further announcement would be made, as appropriate, in due course.