Arabian American Development Co. (Nasdaq: ARSD) announced today that the Al Masane Al Kobra mine, in which Arabian American is a 41% equity owner, has received the first US$38 million (SR141 million) payment related to a permanent loan from the Saudi Industrial Development Fund.
This initial draw enabled AMAK to repay the initial bridge loan from a Saudi French Bank and allowed AMAK to arrange a further bridge loan from the Saudi French Bank in the amount of approximately US$44 million (SR165 million) which is needed for the completion of the mine's construction and working capital. This bridge loan will be repaid via the second draw on the SIDF loan later in the year.
The Company also announced the following updates from a recent AMAK Board of Directors' meeting which was held in Saudi Arabia.
- AMAK has hired a Chief Financial Officer and an Environmental Manager. This completes the executive staff that already included a Chief Executive Officer, a Chief Operating Officer, and a Mining Engineer. The AMAK Board is now interviewing laboratory personnel and geologists in order to complete supervisory staff requirements in preparation for operations.
- The AMAK Board named one of its members, Mohammed Aballala, as the Managing Director in an effort to expedite the decision making process at the mine. With a number of issues still to be accomplished on the critical path to commencing operations and because of the globally dispersed nature of its members, the Board wanted to remove any unnecessary barriers to progress. Mr. Alballala has a long history of managing construction projects and is capable of guiding the staff to keep the project on schedule.
- Recently in conjunction with the 5th Global Competitiveness Forum in Riyadh, ARSD was listed as number fifty-four on the list of top 100 foreign investors in Saudi Arabia. AMAK signed on as a sponsor in the Najran Investment Forum to be held on March 13-15.
Mr. Carter commented, "The AMAK Board made significant strides both operationally and financially at this meeting to position the mine for operation as the mill is now approximately 98% complete. Mr. Aballala's demonstrated leadership skills will allow final details to be resolved in a timely manner. We look forward to the mine becoming operational by the third quarter of 2011, as expected, with ore tests to be run in the second quarter of 2011. Full production should commence by the end of 2011. The actions taken by the Board will contribute to creating long-term value for shareholders."
Mr. Carter continued, "The proximity of the current AMAK location to the four new lease areas which we filed applications for recently, provides the potential for significant development and operating synergies and could contribute significantly to an expanded footprint in Saudi Arabia. Getting the current area into production and having expanded areas to work on for future development, give the Company a significant opportunity to be a player in the rapidly growing mining industry in Saudi Arabia. As AMAK has gained momentum and approaches the operational mode, we have been delighted to see the Saudi investment community take notice and include AMAK in these prestigious economic development events. When operational with full staffing, we will be a major employer in the region which is becoming a land of new opportunities in the Kingdom."
Source: Arabian American Development Co.