Symbol: no money woes, we’re just cracking on with digging up zinc
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Zinc producer Symbol Mining says it’s not a big deal if it doesn’t lock in a previously announced $1.1m convertible note, because things are going well with its production schedule and it has an understanding major shareholder.
Symbol (ASX:SL1) told investors just before Christmas that it negotiated a convertible note with a US-based investment firm and it would update the market once binding agreements had been finalised.
There has been no news and investors are getting restless: they want to know what is happening with the funding.
Since mid-last year, Symbol’s share price has slumped nearly 53 per cent to 1.7c.
Chief Tim Wither told Stockhead the deal is still being finalised and that Symbol didn’t want to rush into anything.
“We haven’t executed that convertible note, so it’s still up for discussion,” he explained.
“Basically, what I have been saying to most of our shareholders is we won’t be doing anything that is destructive to the company. It has to be in the best interests for all parties.”
Mr Wither said the convertible note was just to “give us some contingency and a bit of breathing space”.
“We’ve been fully supported by Noble so we’re not rushing into anything that’s not necessary,” he said.
At the same time Symbol announced the convertible note deal, the company revealed that Hong Kong-based commodities trader Noble had agreed to increase its loan by $US2m ($2.8m) to $US5m and extend the repayment period by three months.
Noble is also Symbol’s off-take partner.
“They understand we’re walking forward and doing everything right, just a little bit slower than what we originally put on paper through the scoping study,” Mr Wither said.
Symbol shipped the first zinc concentrate from its Macy project in Nigeria to China in late November last year.
High-grades, no worries
The company said in August last year when it released an updated scoping study that despite the current low zinc price, the Macy project is expected to be cash flow positive because it produces a high-grade product.
The zinc price has increased about 10.5 per cent since August and is trading at about $US2568.
Mr Wither said if the company doesn’t finalise the convertible note deal, it will just continue to deliver on its production schedule.
“Things are going really well for this month coming out of the Christmas period,” he said.
“The grade going through the plant is near 20 per cent against a resource of 18.7 per cent. We’re getting some really good recoveries and … this month is shaping up okay and the quarter is still going to be delivering to plan.
“So that’s our priority for the company and that removes any requirement for convertible notes.”
Zinc grades over 12 per cent are considered high-grade.