Mining company Noventa, with assets in Mozambique, close to bankruptcy

25 July 2012

Noventa, a mining company with assets in Mozambique, may have to declare bankruptcy if it is unable to extend the maturity of its current loan facility or, alternatively, find additional long term funding, said the Jersey-based company.

Difficult market conditions and limited investor interest meant that funding by issuing warrants worth US$35 million to be used in Mozambique, was not successful.

Noventa, which is listed on the Toronto and London stock exchanges, needed the funding to finish the project to expand the Marropino mine, which is located in the district of Ile, in Zambézia province, in order to increase its tantalum production from 200,000 pounds to 600,000 pounds.

The company, which is involved in negotiating the terms of a loan provided by a banking syndicate and in extending its current credit facility by US$10 million with its main shareholder Richmond Partners Master, has been seeking alternative financing options in order to ensure payment of its debts and find additional capital for some of its projects.

Noventa’s main activity is production of tantalum pentoxide (Ta2O5), and its Mozambican subsidiary, Highland African Mining Company Limitada, has concessions in Marropino, Morrua and Mutala in Zambézia province and exploration licenses in adjacent regions. (macauhub)