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Notice of Results + Debt refinancing
Trans-Siberian Gold plc (TSG.LN), a low cost, high grade gold producer in Russia, announces that the Group's financial results for the year ended 31 December 2019 will be published on Monday 8th June 2020.
As previously reported, 2019 was a record operational year for TSG and the Board expects the full results for the year ended 31 December 2019 to be in line with management expectations.
The Group's operations continue to be largely unaffected by COVID-19 and the Group is currently benefitting from a strong gold price environment. TSG remains committed to the previously indicated production and dividend guidance for 2020.
Debt Re-Financing
TSG's subsidiary AO Trevozhnoye Zarevo ("TZ") has entered into an agreement with PJSC VTB Bank ("VTB") for a revolving credit line with a limit of $10 million for a period of 3 years.
This agreement, successfully re-finances an existing credit line with a limit of $5 million expiring on 20 June 2020 and enhances the short-term liquidity of the Group. The existing facility has been fully repaid. TZ currently has not drawn down any funds under the new credit facility.
The interest rate on the new facility has been reduced from 6.2% to 5.2% per annum. The credit agreement retains customary representations and warranties from TZ to VTB and is secured against the equity and fixed assets of TZ. Certain amounts drawn down under the credit line must be repaid within one year. TZ also retains its obligation to sell gold exclusively to VTB Bank.
Furthermore, the Credit Committee of VTB has agreed to lower the current interest rate on a separate existing Russian ruble-denominated credit line, which was provided to TZ in 2019 at an annual interest rate of 10.7% and has a current balance of ?604.5 million (approximately $8.8 million). A floating interest rate will now be set on this existing facility, calculated as 3.5% over the lending rate of the Russian Central Bank.
The key lending rate of the Russian Central Bank currently stands at 5.5% per annum, meaning the annual interest rate attached to the loan will now amount to 9%, resulting in a 1.7% reduction in the cost of borrowing per annum. An additional agreement regarding the change of the interest rate is expected to be signed before the end of June 2020. Other credit facility conditions remain unchanged.
Following a careful evaluation of available refinancing options, the Board is confident that the debt levels remain low by industry standards and provide an appropriate capital structure, giving the Group enhanced liquidity on improved terms.
"The Group's operations continue to be largely unaffected by COVID-19 and the Group is currently benefitting from a strong gold price environment. TSG remains committed to the previously indicated production and dividend guidance for 2020." - tantalising. Will we get a dividend?
"says there in black and white" - I do expect them to announce a dividend, but I seem to be unable to spot the words - "We are going to pay a dividend". It is not there in black and white.
Last December I topped up by a considerable amount anticipating a dividend being announced in January - they didn't announce one. I think they decided that the money would be better spent on drilling campaign, because, as well as being committed to paying dividends, they are also committed to increasing shareholder value through expansion of reserves. I don't have time to look up their actual wording, so I hope my paraphrasing is close enough, but the point is yes the company intends to pay dividends, but it is not guaranteed.
However, I think we are all greed that a dividend will be announced. Would anyone care to speculate on how much it might be?
The April 2020 presentation was pretty clear a dividend of at least $3m will be paid out:
"FY20 base case guidance of $3m dividend +potential for special dividends, as appropriate" (pg.30)
£3M in dividends...87M shares in circulation. Around 3.5p p/share (or near enough 4%) by my reckoning.
Not a holder here yet, but looking to buy-in. May've missed the boat, although it looks like PMs will take a kicking in the short-term.
Pity pog is tumbling just now or I'd be looking forward to Monday, but we'll see..
Sorry to be nit-picking here Visitor - but what you have posted is in the "Objectives & Guidance" column and to me that makes it pretty clear they hope to pay a dividend, but not that they "will" pay out. Earlier this year, HOC even went so far as to declare the dividend, but then cancelled it. Don't count your chickens, as they say, is good advice, however, with things looking good (no COVID issues and a rising gold price) I do expect them to announce a dividend .
GLA and let's hope its a good payout.