Tag Archives: Sentient Group

Sentient Group to pump $14 million into Marengo

Funds to be used in part for drilling and exploration work at Yandera

Sentient, a private equity investment firm based in the Cayman Islands, set to own up to 95% of Marengo shares

yandera

Marengo Announces Proposed Financing with Its Major Shareholder

Junior Mining Network

Marengo Mining Limited is pleased to announce it has entered into an agreement (the “Letter Agreement”) with its major shareholder, Sentient Executive GP IV, Limited, acting as the general partner of Sentient GP IV, L.P., itself acting as the general partner of Sentient Global Resources Fund IV, L.P. (collectively, “Sentient”) in connection with the proposed issuance of US$14,000,000 principal amount of convertible unsecured debentures (the “Debentures”). In addition to the Company, its wholly-owned subsidiaries, Yandera Mining Company Limited and Marengo Mining (PNG) Limited (collectively, the “PNG Subsidiaries”) have executed the Letter Agreement as guarantors of the Company’s obligations under the Debentures. Sentient intends to subscribe for up to US$14 million in Debentures to be issued in two tranches, with the first tranche of US$7 million (the “First Tranche”) to be completed following the approval of the Company’s shareholders at the annual general and special meeting to be held on November 13, 2015, and the second tranche of US$7 million (the “Second Tranche”) to be completed five months after shareholder approval is obtained. These transactions are also subject to approval by the Toronto Stock Exchange (“TSX”).

Subject to obtaining the necessary shareholder approval, Marengo will be completing a share consolidation whereby for every 100 Marengo common shares, one post-consolidation Marengo common share will exist (the “Consolidation”).

The Debentures will mature on December 31, 2017, (the “Maturity Date”); the Debentures will not bear interest. Each US$1,000 principal amount of Debentures will be convertible into common shares of the Company (“Common Shares”) at a conversion price of C$0.45 per Common Share (the “Conversion Price”) on a post-Consolidation basis, rounded up to the nearest Common Share. Each Debenture will be convertible, in whole or in part, at the option of Sentient and at any time, into Common Shares, intended to be freely tradable on the TSX, at the Conversion Price, for each US$1,000 principal amount of Debentures, subject to adjustment in certain circumstances as described below.

The conversion price for existing outstanding debentures of the Company held by Sentient pursuant to the terms of prior debenture financings between the Company and Sentient completed in 2014 (the “Prior Financings”), will be adjusted to CDN$0.0045 per common share or CDI upon receiving the necessary shareholder approval, and further adjusted on the Consolidation being effective to CDN$0.45 per common share or CDI.

Sentient and its related entities currently hold approximately 22% of the issued and outstanding common shares of the Company and would hold approximately 95% of the common shares of the Company, assuming the conversion of all the Debentures issued in connection with the Transaction and the conversion by Sentient of all debentures issued and issuable pursuant to the Prior Financings.

The use of proceeds will primarily be for drilling and exploration work at the Yandera Project and the company’s operations in PNG, exploration work at the La Cobota Project in Mexico, working capital and general corporate purposes.

“This financing allows Marengo to continue the budgeted work programs for the Company’s Yandera and La Cobota Projects, and potentially pursue other base metal opportunities globally,” commented Pieter Britz, President and CEO.

Marengo recently appointed André Wessels B.Eng, MBA, GAICD, MAusIMM, as VP Projects, responsible for commencing the work necessary to initiate the feasibility study for the Yandera Project. Mr. Wessels has more than 23 years experience in mining and related fields, steel, financial services and technology industries.

The Company has also appointed Jon Powell as VP PNG Operations to oversee all project related activities in PNG. Mr. Powell is an accomplished manager with over 25 years of international experience in the geophysical/mining exploration sector and has extensive background in global personnel management, logistics and operations.

The Company has also appointed Dr. Nathan Chutas as its Exploration Manager for the Yandera Project. Dr. Chutas has over 15 years of experience in mining and exploration, having worked on a variety of metallic resource projects in the US, Alaska, Mexico, South Africa and PNG.

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Marengo to raise $7.5 million for Yandera from new majority shareholder

yandera

$7.5M ISSUE TO START PNG DRILLING RUSH

Mining Business Media

Marengo plans an immediate start to drilling at its Yandera copper-moly-gold project in PNG in December, when it completes the $US7.5M debenture note issue to new majority shareholder Sentient Executive GP-IV.

Contractors are immediately available and a rig is mobilised onsite pending shareholder and TSX-ASX approvals. The deal will lift Sentient’s shareholding from 22% to as much as 88%.

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Yandera: Drilling results encouraging

Ancilla Wrakuale | Post Courier

DEVELOPER of the Yandera copper project in Madang, Marengo Mining Ltd, has announced the first results of its drilling campaign and finance discussion for the facility.

In a statement released to the market yesterday, the miner said the first diamond drill of its 2013 campaign targeting the near-surface Dimbi zone within the Yandera Central Porphyry System at its flagship Yandera Copper-Molybdenum-Gold has returned encouraging results.

A 2,000m (10-hole) diamond drilling campaign commenced at Dimbi in mid-September with the objective of identifying near-surface resources with the potential to delineate a starter pit for the Yandera mining operation which could enhance the Project.

The new drill-holes have been designed to target projections of interpreted north-east striking mineralised structures in the hanging wall of the Dimbi Fault, a major north-westerly striking structure which dips to the north-east and bounds the Dimbi Zone on the south-west.

The statement said the Dimbi drilling program has been progressing well with three holes (YD 551, YD 552 and YD 553) completed to date and the fourth hole currently in progress. The first batch of assay results has been received for the first hole, YD551, for the interval from surface to 162m down-hole.

Marengo’s President and CEO, Mr Les Emery, said he was pleased and encouraged by the early results from Dimbi, with the first hole intersecting a broad zone of mineralisation with an average grade for the sections for which assays have been received, significantly above the current Mineral Resource grade at Yandera.

“This is a significant result for Yandera, providing strong early encouragement that the current drilling campaign can outline an extensive near-surface zone of higher grade material at Dimbi – with important strategic implications for the overall Yandera development.

“Dimbi has received relatively less attention as an exploration target in the past compared with the other zones which make up the Yandera Central Porphyry, mainly because of the challenging terrain in this area,” Mr Emery continued.

He said the drilling so far has confirmed the very encouraging results from detailed tape and compass-based field mapping carried out earlier this year over the Dimbi zone.

He said the drilling zone gave them the confidence that the program was appropriately targeted and represents the right strategy for the Yandera Project at this time.

‘We look forward to receiving further results from the current drilling campaign over the coming weeks and months,” he said.

The miner said it has entered into discussions regarding the $10 million (K26.46m) loan provided by the Sentient Group, in advance of the December 31, 2013 maturity date for this facility.

“Discussions have been positive to date, and we expect to have a further update regarding these discussions in the coming weeks”.

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Marengo loses A$8m

The National aka The Loggers Times

MARENGO Mining has recorded a loss A$8 million (K18 million) for the financial year ending June 30, this year, according to its annual report.

The group also reported a consolidated working capital deficiency of more than A$7 million (K15.75 million) and net cash outflows from operations of  more than US$7 million (K15.75 million).

And incurred expenditure of more than A$30 million (K67 million), which Marengo said was a result of ongoing feasibility study being undertaken at the Yandera project.

Given the extensive nature of the feasibility study and additional optimisation opportunities currently being considered, Marengo’s major shareholder, Sentient Executive GP IV (Sentient) initially provided an unsecured, interest-bearing working capital facility of A$10 million (K22.5 million), repayable in December.

In May, Marengo also entered into a debenture purchase agreement with Sentient, whereby Marengo issued 15,000 convertible notes for A$15 million (K33.75 million) inthree tranches.

As at June 30, 2013 tranche one and two have been drawn for a total of A$9 million (K20 million) while the third tranche of A$6 million (K13.5 million) was subsequently drawn down post year in August.

The group has available cash and term deposits of over A$6 million (K13.5 million) and an additional drawdown under the convertible note facility of US$6 million (K14.4 million) to provide for on-going expenditure relating to:

  • finalising the Group’s feasibility study; and
  • advancing the Group’s district exploration programme at the Yandera Project.

The continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitmentsas they fall due are dependent upon the Group being successful in:

  • Receiving the continuing support of its shareholders, particularly for the Group’s effort to restructure the maturity of the A$10 million (K22.5 million)  working capital facility that is currently repayable on Dec 31, 2013; and
  • Raising additional funds as necessary, either through debt, asset sales, or equity.

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Miners doing it tough

Wantok | PNG Industry News

PNG’s mining and exploration scene has moved from feast to famine after a decade of high commodity prices, record exploration and development activity.

The theme has been well captured by one of the erstwhile exploration highflyers, Frontier Resources, which has announced that following the final payment from Newcrest for a farm-in it will have $A500,000 left in the kitty.

“This will provide adequate ‘hibernation’ income for the remainder of 2013,” Frontier said, adding that all possible expenditures had been minimised with directors fees cut for the year.

Nevertheless, a small capital raising may be needed later this year to fund corporate costs and essential work programs for 2014.

Frontier has been among the front runners on the exploration scene with farmout deals with Newcrest and Ok Tedi Mining Ltd. Now it is at the mercy of market forces.

At the other end of the scale two projects that have appeared as highly prospective for early development – Marengo Mining’s Yandera copper-molybdenum project and the two billion tonne Frieda River copper-gold project – have both become victims of the deteriorating climate.

Short term funding from its major shareholder, Sentient Global Resources, appears likely to take that company’s equity stake from 22% to 33.8% in an essentially holding operation as further work is carried out on a longstanding feasibility study.

Work on the feasibility study, including power options and tailings disposal plans, could take another couple of years or more to finalise and given the relatively low current ore grades Yandera might miss the development opportunity till the next commodity upturn.

Frieda River is in a different category with generally better grades but very high capital costs for development and a corporate owner in Xstrata that has lost its sense of commitment to the project.

In addition the feasibility study it conducted has been found wanting; it doesn’t look in retrospect that Xstrata had its heart in the right place in completing the feasibility, more intent on meeting its joint venture deadline with Highlands Pacific than with carrying out a thorough job. This, in spite, of the huge amounts of spending that has already been involved.

The production costs used by Highlands in the feasibility of $US3 a pound of copper and $1500 an ounce gold no longer appear realistic projections for the short to medium term given the recent fall in gold prices, albeit briefly, below $1,200.

Copper is still holding up above $3/lb but it is well below historical highs and global copper stockpiles appear to be building.

In short, it does appear that Frieda River may be missing the development opportunity in the medium term as it continues to struggle with corporate issues, uncertainty over power options and lack of full clarity on tailings disposal plans.

Newcrest has also announced plans to further streamline its Lihir gold operation, including minimisation of waste handling in the open pit and great reliance on stockpile processing. Its recently completed million ounce upgrade will probably provide a valuable buffer in the next term as production ramps up and costs begin to fall.

Barrick will also be casting an eye over potential economies at its Porgera mine as it battles the ever-present issue of illegal miners, while Ok Tedi may need to reassess its mine extension plan in view of new market conditions.

In both mines the problems related to overburden removal and handling loom large. In the case of Porgera they contribute to open pit mining problems while at Ok Tedi it is a crucial aspect of mine life extension. Falling fuel prices could aid in more economic handling of this waste, though most analysts do not appear to see reducing oil prices as a likely outcome in the present climate.

In surveying the mining scene it is at the Hidden Valley silver-gold mine where the mining fraternity appears to have lost its grips on reality.

Both equal owners Newcrest and Harmony Gold have announced they will take significant impairment costs on Hidden Valley, which is loss-making with little hope of a turnaround in the current climate.

If the current climate persists, some tough decisions can be anticipated on Hidden Valley with the rest of the sector remaining under a cloud.

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Sentient builds its stake in Marengo Mining despite marine waste dumping plans

Marengo Executes Debenture Purchase Agreement to Its Major Shareholder and Finalizes Initial Placement

Marengo Executes Debenture Purchase Agreement to Its Major Shareholder and Finalizes Initial Placement

Stockhouse | Marengo Mining

Marengo Mining Limited is pleased to announce that, further to binding terms having been reached (see the Company’s press release dated April 30, 2013), the Company (together with its wholly owned subsidiaries Yandera Mining Company Limited and Marengo Mining (PNG Limited) has signed and executed a Debenture Purchase Agreement with its major shareholder, Sentient Executive GP IV, Limited for the General Partner of Sentient Global Resources Fund IV, L.P. (“Sentient”), providing for the issuance of up to US$15 million principal amount of convertible unsecured debentures (“Debentures”) to Sentient. The Debentures will be guaranteed by Marengo Mining (Australia) Limited and Yandera Mining Company (Holdings) Pty Ltd (both wholly owned subsidiaries).
Having met certain conditions precedent, including confirmation of the extension of terms for PNG Exploration Licence EL1335, Sentient and Marengo will complete, on or about May 30, 2013, the initial placement of US$9.0 million principal amount of Debentures.
Each US$1,000 face value Debenture will be convertible, at the option of Sentient, into common shares or Chess Depositary Interests (“CDIs”) of the Company at a conversion price of CDN$0.11 per common share or CDI. The conversion price of the Debentures will be adjusted in the event there is a reorganisation of capital or an issue of new shares at below the conversion price. The Debentures will mature on June 30, 2016, or three years following the closing date of the final tranche, whichever is earlier. The Debentures will bear interest at a rate of 9% per annum.
The Company will pay to Sentient an establishment fee of 2.0% of the amount raised by the Company through the issue of Debentures. The interest payable and the establishment fee will be satisfied through the issuance of additional Debentures.
Subject to the formation of, and consultation with, a technical committee to be comprised of representatives from the Company and Sentient, Marengo expects to use the net proceeds from the placement for the development of the Yandera Project and for general corporate purposes.
The remaining US$6.0 million in Debentures will, subject to receipt of necessary approvals, be issued following the holding of a meeting of the shareholders of Marengo required to approve the issuance of the additional Debentures. This tranche will also be conditional on Sentient being satisfied with the Company’s work program and related budgets.
Sentient currently holds 22.0% of the common shares of the Company and would hold approximately 33.8% of the common shares of the Company, assuming the conversion of all the Debentures issued in connection with the private placement (including the Debentures issued to pay interest payments on the Debentures and the establishment fee).
In addition, subject to the same conditions, the Company and Sentient have agreed to vary the existing unsecured facility of US$10 million provided by Sentient in February 2013 such that all interest accrued and payable under the facility shall be satisfied through the issue of 1,000 Debentures (“Interest Payment Debentures”); Sentient may therefore hold up to 16,300 Debentures without taking into account interest on the Debentures.
The Company is currently preparing a notice of meeting to seek shareholder approval for the issue of the final tranche of Debentures and Interest Payment Debentures and expects to send this to shareholders as soon as practicable.

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PNG press reports on Marengo woes

Post Courier

Yandera project deferred

The National aka The Loggers Times

Marengo seeks new power source

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Marengo and Sentient Group look again at dumping toxic tailings in pristine oceans

Marengo Mining conducting more studies at Papua New Guinea copper, molybdenum project

Bevis Yeo | Proactive Investors

Marengo Mining has deferred the Feasibility Study for its Yandera Copper-Molybdenum-Gold Project in Papua New Guinea to undertake a focused optimisation program.

 This is expected to make substantial improvements to the project.

Marengo believes that opportunities to enhance Yandera include review optimised ore throughput rates; the option of Deep Sea Tailings Placement rather than a land-based Tailings Management Facility; and further optimisation of the mine plan.

A detailed review of recent technical work in support of a Feasibility Study will be undertaken by the technical committee established by Marengo and major shareholder The Sentient Group to implement a programme to enhance project returns

Additional work is also required in a number of areas before a final Feasibility Study can be prepared. 

This includes identifying an alternative cost-competitive source of power for the project after Marengo’s preferred third party power provider decided to withdraw from the proposed power supply arrangements.

Power is a major issue currently confronting a number of mining companies seeking to develop major new resource projects in-country.

Chinese partner China Nonferrous Metal Industry’s Foreign Engineering and Construction has also reiterated its support for the Project and will be closely involved in working with Marengo and Sentient during the next phase of technical optimisation.

Yandera is located about 95 kilometres southwest of the seaport of Madang within the highly prospective New Guinea copper-gold belt.

The Yandera Central Porphyry System contains one of the largest undeveloped porphyry copper-molybdenum-gold systems in the southwest Pacific.

Yandera has a total Measured and Indicated Resource of 362 million tonnes at 0.43% copper while its Inferred Resource currently totals 218 million tonnes at 0.37% copper.

It also includes a Measured contained molybdenum and gold resources of 101 million pounds and 847,172 ounces respectively.

The Sentient Group manages over US$2.7 billion of funds invested in the development of metal, mineral and energy assets across the globe through its Cayman-based, 10 year closed-end private equity Sentient Global Resources Funds.

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Marengo admits power problems and retreats on no marine dumping

Marengo Announces Yandera Copper-Molybdenum-Gold Project Feasibility Study and Company Update

Marketwired | Junior Mining Network

Marengo Mining Limited provides the following update on its Yandera Copper-Molybdenum-Gold Project in Papua New Guinea, following a review of the progress of recent technical work in support of a Feasibility Study in consultation with its major shareholder, The Sentient Group (“Sentient”).

The Company’s Board of Directors has decided that additional work is required in a number of specific areas before a final Feasibility Study can be prepared, specifically:

  •  Identifying an alternative cost-competitive source of power for the Project after Marengo’s preferred third party power provider decided to withdraw from the proposed power supply arrangements.

The Feasibility Study indicates that Yandera has the potential to generate substantial cash flows. However in the absence of a power solution that can support the Project, it is exposed to escalating capital and operating costs.

Further opportunities to enhance the Project include:

  •  A review of optimized ore throughput rates;
  •  Reviewing the option of Deep Sea Tailings Placement (DSTP) rather than a land-based Tailings Management Facility (TMF); and
  •  Further optimisation of the mine plan.
  • A detailed review of recent technical work in support of a Feasibility Study will be undertaken by the technical committee established by Marengo and Sentient to implement a programme to enhance project returns. The objective of this review is to help ensure that the Yandera Project is robust at all phases of the commodity price cycle.

Sentient, which is providing funding support to Marengo through a recently announced US$15 million private placement of convertible debentures, will be involved with Marengo’s project team in this next phase of technical optimisation.

The Sentient Group manages over US$2.7 billion of funds invested in the development of metal, mineral and energy assets across the globe through its Cayman-based, 10 year closed-end private equity Sentient Global Resources Funds.

Marengo has already commenced high-level discussions with the PNG Government regarding other potential power supply options for the Yandera Project. Power is a major issue currently confronting a number of PNG mining companies seeking to develop major new resource projects in-country.

Marengo will continue to work closely with the PNG Government to resolve the power issue and also to explore other strategic options for Yandera’s development.

The Company’s Chinese partner, the major engineering, construction and mining company, China Nonferrous Metal Industry’s Foreign Engineering and Construction Co Ltd (NFC), has also reiterated its support for the Project and will be closely involved in working with Marengo and Sentient during the next phase of technical optimisation.

The Engineering, Procurement and Construction (“EPC”) pricing provided by NFC in February 2013 provides a strong foundation for project development and Yandera remains one of NFC’s premier offshore development projects.

The President of NFC, Mr Wang Hongqian, recently commented: “Marengo’s Yandera Project is a high priority for NFC. We remain fully supportive of Marengo as it advances the development of the project.”

The Company has initiated a review of administration, consultant and corporate overheads in order to ensure that costs are controlled and maintained at an appropriate level for this next phase of activity.

Marengo’s President/CEO, Mr Les Emery:

“Yandera is a large copper resource and this fact is clearly recognised by our strategic partners. However, the recent withdrawal of our preferred third party power provider has resulted in an unexpected cost escalation which negatively impacted on the current rate of economic return.

“Accordingly, we have decided to defer completion of work in relation to a Feasibility Study and undertake a focused optimisation program. We are confident that this work has the potential to make substantial improvements to the Project that could deliver lasting benefits for all stakeholders.”

Corporate
The Company wishes to advise that, following the completion of the Canadian redomicile, Mr. Dean Richardson has been appointed Marengo’s Corporate Secretary.

Les Emery, President/CEO

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