Metals X breaches loan covenants to focus on Tasmanian mine

Australia’s Metals X Ltd said on Friday it breached two financial covenants of a facility agreement with Citibank as it chose to go ahead with the development of the Renison tin mine in Tasmania.

The tin producer said cash flows will be hit by its decision to develop the mine, which requires spending of A$50 million to A$55 million ($34.77 million to $38.24 million) over the next two years.

That decision meant the company did not meet a forecast cash flow and a forward debt service cover covenant for the quarter ended in June.

Metals X has been locked in a shareholder dispute that has hurt the miner’s ability to repay debt, forcing it to seek a buyer for its entire copper portfolio.

The miner said it has until July 20 under its current agreement with Citibank to come up with a way to meet its covenants or come to another agreement that the lender would accept.

It, however, met two of the other covenants of the facility agreement, the company said in an aftermarket statement.

Shares of the company were up 11.8% this year, as of last close.

($1 = 1.4382 Australian dollars)

(By A K Pranav; Editing by Kim Coghill)