ENP Newswire - 13 January 2014 Release date- 10012014 - London, UK - Sierra Rutile Limited (AIM: SRX) is pleased to provide an operational update on the fourth quarter of 2013. Highlights: Record full-year 2013 rutile production of 120,349 tonnes, a 27% increase on 2012 production. Full-year ilmenite production of 32,349 tonnes, a 47% increase on 2012 production. Production for Q4 was in line with budget: Rutile production of 36,059 tonnes, a 12% increase on Q3 2013 production and Ilmenite production of 9,231 tonnes, a 13% increase on Q3 2013 production. 50,000 tonne rutile sales agreement entered into with a major pigment producer. MOU signed with Smol Pawa Sierra Leone Ltd. in connection with being a cornerstone purchaser for its 11-14MW run-of-river Moyamba hydro project, a low-cost, near-mine hydroelectric power project. 2014 production and operating cost guidance: Full Year 2014 Production: Rutile: 131,000 tonnes Ilmenite: 28,000 tonnes Operating Costs: Operating cash cost: US$490 / tonne of rutile All-in operating cash cost: US$605 / tonne of rutile Production Full-year 2013 production was 120,349 tonnes of rutile and 32,349 tonnes of ilmenite, respectively 27% and 47% ahead of 2012 volumes (2012: 94,493 tonnes of rutile and 22,008 tonnes of ilmenite). The strong result, in-line with updated guidance provided on 20 November 2013 , was supported by a strong Q4 production of 36,059 tonnes of rutile and 9,231 tonnes of ilmenite. This record production was achieved having sustained no lost-time injuries during 2013. Low-Cost Hydro-Power Project During the quarter, Sierra Rutile entered into a memorandum of understanding with Smol Pawa Sierra Leone Ltd. ('Smol Pawa') to become a cornerstone purchaser for its Moyamba hydro project. The Moyamba hydro project is an 11-14 MW run-of-river hydroelectric project located at the Singimi Falls on the Gbangba River , within 20km of Sierra Rutile's existing operations. The project will be developed as a public-private partnership with the Government of Sierra Leone and will serve the communities of Moyamba, Njala University and Sierra Rutile . A feasibility study is currently being completed for the project, and financing, permitting and construction are expected to be completed within 36-48 months. Financing As at 31 December 2013 , Sierra Rutile had US$22.6 million in cash and an inventory of 36,600 tonnes of rutile. During the quarter, Sierra Rutile entered into an agreement with Nedbank Limited (' Nedbank ') for the provision of a US$30 million senior loan facility. The facility has a tenor of four years from financial close, carries an interest rate of LIBOR plus 5.25%, and is secured against the assets of Sierra Rutile . Closing and drawdown of this facility is subject to satisfaction of a limited number of outstanding conditions customary for a financing of this type. Sierra Rutile has up until the 31 December 2014 to reach financial close and a further 18 months to draw down the funds. Sales During the quarter, Sierra Rutile entered into a 50,000 tonne rutile sales contract with a major pigment producer. The contract will be fulfilled through a number of shipments which will take place before 31 March 2014 with volume split evenly between Q4 2013 and Q1 2014. Approximately 25,000 tonnes is still to be delivered. Sierra Rutile has contracted approximately 75% of its projected Q1 2014 production. Commenting on the Q4 performance, CEO John Sisay said: 'I am pleased with the company's operating performance during the period, where we achieved a record 120,349 tonnes of production. The company is well placed for continued production growth in 2014, where in addition to our current cost-efficiency efforts, we will continue to leverage the high fixed-cost nature of our business to drive down unit operating costs further.' We are also pleased with the signing of the Nedbank senior loan facility and the execution of the MOU with Smol Pawa. Both agreements support Sierra Rutile's future growth strategy of investing in capital efficient, short pay-back projects, which will ensure that we maximise the value from our world-class orebody and further cement Sierra Rutile as one of the world's leading producers of high-grade natural rutile.' Forward-Looking Information This document may contain forward-looking statements. These forward-looking statements are made as of the date of this announcement and Sierra Rutile Limited (the 'Company') does not intend, and does not assume any obligation, to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and future performance and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as 'plans', 'expects' or 'does not expect', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate', or 'believes', or variations of such words and phrases or statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will be taken', 'occur' or 'be achieved' or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual reports. These risks, uncertainties, assumptions and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking statements. Contact: Sierra Rutile Limited Yves Ilunga Chief Financial Officer Tel: +44 (0)20 7074 1800 RBC Capital Markets Stephen Foss Jonny Hardy Tel: +44 (0)20 7653 4000 Mirabaud Securities Peter Krens Tel: +44 (0)20 7321 2508 About Sierra Rutile Limited Sierra Rutile produces titanium feedstock industrial minerals (primarily rutile, with some associated ilmenite), as well as smaller quantities of zircon. Sierra Rutile's mine, located in the south west of Sierra Leone, is one of the largest natural rutile deposits in the world, with a JORC-Compliant Mineral Resource for measured, indicated and inferred resources for the Sierra Rutile mine of over 800 million tonnes (as at 31 August 2012).
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