Capital Ltd on Monday said it has won a new mining services contract and has agreed an extension its revolving credit facility.
The contract involves both earthmoving and crushing services for Ivindo Iron SA. Ivindo Iron is the operating entity for the Belinga project, and Australia’s Fortescue Metals Group Ltd has a 72% indirect interest in the company.
Ivindo is located in the north east of Gabon. The London-based mining services company described it as ‘one of the world’s largest undeveloped, high-grade hematite iron ore deposits with the potential to become a globally significant iron ore mine’.
The contract has a term of up to five years and will generate approximately $30 million of revenue per year for Capital once fully operational.
Capital noted that it will use its existing equipment and is in the process of purchasing about $15 million of additional equipment. The company’s capital expenditure guidance for financial 2023 is now in the range of $65 million to $75 million, up from $50 million to $60 million previously.
Capital added that it has begun mobilising equipment to the site in central Africa.
‘We are thrilled to have been awarded the mining and crushing services contract at Ivindo. This is our second significant mining services contract and continues our strategy to diversify our revenue stream through an expanded service offering,’ said Chief Executive Officer Peter Stokes.
‘We look forward to working closely with Ivindo Iron to expand our relationship from drilling services to mining and crushing services and ensure a rapid ramp up on this world class deposit.’
Capital also increased its revolving credit facility to $50 million from $25 million.
As part of of the upsize of the lending facility, Capital has formed a new banking relationship with one of the premier lenders in Africa, Nedbank Ltd. Nedbank is co-lending the facility with the previous sole RCF lender Standard Bank Ltd.
The facility provides the company with additional balance sheet flexibility to deliver on growth opportunities.
Shares in Capital were up 5.8% to 102.00 pence each in London on Monday morning.
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