London-listed Tri-Star has announced a placing to raise £13-million, the proceeds of which mainly will be used to meet its share of additional investment in its Oman antimony and gold processing joint venture (JV).

Tri-Star, which owns 40% of Strategic and Precious Metals Processing (SPMP), said on Friday that it would issue ordinary shares at 43p each by way of an accelerated bookbuilding process.

Funds managed by Odey Asset Management have committed to invest up to £13-million in the placing.

SPMP is only expected to receive initial revenues in the commissioning phase in the third quarter of this year, while first significant revenues will only arise in the final quarter of 2018. However, during the commissioning phase, the project will require further short term operational and working capital financing and is seeking about $30-million from its shareholders to cover this.

Accordingly, Tri-Star is expected to be required to invest in SPMP in order to maintain its 40% equity stake in the project.

The SPMP facility is one of the first modern designed, fully environmentally permitted, minor metal roasters to be built outside China in the last 30 years.  Under full operating conditions, the plant will produce about 20 000 t/y of antimony products, supplemented by about 60 000 oz/y of gold. At current market prices, this will result in indicative revenues for SPMP of about $245-million a year.

Tri-Star reported on Friday that plant construction was about 97% complete, main grid power was connected and cold commissioning was well underway. 

“Hot commissioning commences later this month leading to the production of antimony trioxide followed by the production of antimony and gold ingot later this summer,” the company said.

The plant is expected to gradually ramp up to full operating capacity during 2018 and 2019.

Tri-Star said that SPMP management estimated that the facility would operate at earnings before interest, depreciation and amortisation (Ebida) margins of about 16% initially, rising to about 20% when at full operating capacity. At full capacity, based on the indicative revenues of $245-million, this would generate around $49-million a year of Ebida.

Tri-Star reported that the SPMP project’s capital cost had increased by about $115-million, owing to exchange rate movements and the inclusion of extra plant functionality.