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(Incorporated in Hong Kong with limited liability)
(Stock code: 1029) POSITIVE STATUS REPORT CORPORATE UPDATE Wednesday, 4 January 2017: The Board of Directors of IRC Limited ("IRC" or the "Company", together with its subsidiaries, the "Group") is pleased to announce that following a series of recent events, the Board would like to highlight the improved position that the Group now finds itself in as it enters 2017.IRC begins 2017 having achieved a number of key milestones critical to ensuring a successful future:
K&S has now entered into the final stages of production testing and will reach full commercial production shortly:
Full scale mining operations now ramping up;
Plant commissioning ongoing with 75% capacity reached at ball mill in December 2016; and
Revolving working capital finance facility obtained to alleviate cash flow.
Amicable settlement of legal and technical dispute with lead construction contractor at K&S:
IRC received cash compensation of US$4.5 million in December 2016 and reduced outstanding construction payment liability by US$3.9 million while reserving the rights to claim for further penalties from the contractor; and
Formal Taking-over Certificate agreed and IRC agreed not to call the performance bond.
Sales of c. 150,000 tonnes of K&S production during the last quarter of 2016:
Positive customer feedback for high quality of iron ore concentrate product; and
Good market demand and IRC is in discussion with a number of potential customers for offtake arrangements.
ICBC project finance facility serviced and positive progress towards relaxation of 2017 payment terms:
US$26 million of principal and interest repaid to ICBC in December 2016, reducing the outstanding principal to c. US$234 million; and
Discussions with ICBC and Sinosure in relation to a waiver of the scheduled 2017 payments is progressing well and the Group will make a further announcement once the outcome of this process is complete.
IRC has secured a new core investor with a proposed additional member of the Board
Tiger Capital Fund injected US$25 million into IRC for newly issued IRC shares, giving them a 13.22% shareholding; and
Tiger Capital Fund propose Mr Cheng Chi Kin to join the Board of IRC as an non- executive director, providing further diversity, expertise and experience to the Board.
2016 year end unaudited cash balance amounted to c. US$30 million.
The impact of a supportive new shareholder together with positive banking and contractor relationships should also yield significant benefits for IRC's stakeholders."
By Order of the Board
IRC Limited Yury MakarovChief Executive Officer
Hong Kong, People's Republic of China Wednesday, 4 January 2017
As at the date of this announcement, the Executive Directors of the Company are Mr Yury Makarov and Mr Danila Kotlyarov. The Non-Executive Directors are Mr George Jay Hambro, Mr Cai Sui Xin (Benjamin Ng as his alternate) and Mr Raymond Kar Tung Woo. The Independent Non-Executive Directors are Mr Daniel Bradshaw, Mr Simon Murray, CBE, Chevalier de la Legion d'Honneur, Mr Chuang-Fei Li and Mr Jonathan Martin Smith.
IRC Limited6H, 9 Queen's Road Central Hong Kong Tel: +852 2772 0007
Email: ir@ircgroup.com.hk
Website: www.ircgroup.com.hk
For further information please visit www.ircgroup.com.hk or contact:
Shirly ChanManager - Communications & Investor Relations Telephone: +852 2772 0007
Mobile: +852 9688 8293
Email: sc@ircgroup.com.hk
IRC Ltd. published this content on 04 January 2017 and is solely responsible for the information contained herein.
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