News

June 05, 2008

Angus & Ross Keeps Fingers Crossed Over Funding For Black Angel

By Our Man In The City

Money is the root of all evil for Angus & Ross, at least when it doesn't have any. The award of a mining licence in late May for the Black Angel zinc project in Greenland and production targeted for the year-end should have been cause for celebration, but short-term financing problems have dampened the party. Angus & Ross hasn't been able to draw down US$17.5 million from a credit agreement from investment group Cyrus Capital and ended up taking a US$1.65 million three-month loan from the partner at a hefty 14.5 per cent annual interest plus US$150,000 arrangement fee. Chairman Robin Andrews is determined to find some more money in the City, but the stock market doesn't like his chances. The share price has fallen by more than two thirds since January and it seems highly likely that the company will get a new majority shareholder, potentially taking stock at a large discount in order to save the business.

“These are sensitive times,” says Mr Andrews, choosing his words carefully while negotiations continue for a cash injection. “It's a sad situation that a company has a mining licence and engineers on the ground ready to build a cable car system, but we've stopped the construction until more money can be found.”

He calls the situation “thoroughly demoralising” but insists that a solution will be found soon. A logical move would be to sell some of the company's assets which include a...