Kropz (AIM:KRPZ), an emerging African phosphate producer and developer, has agreed a ZAR 200 million (approximately $12.3 million) loan facility with Ubunto-Botho Investments (UBI) to shore up working capital at its Elandsfontein mine.
The facility, classed as a related party transaction, follows a weaker quarter at the South African operation.
Elandsfontein produced 95,956 tonnes of phosphate concentrate in the quarter to 30 June, down 17% from 115,686 tonnes in the prior quarter, which itself included a record monthly output of over 40,000 tonnes in March.
The company attributed the decline to variability in the ore body, including slimes, hard bank and pink ore, alongside disruptions from mining contractor availability that interrupted ore flow to the processing plant.
Higher energy, consumable and freight costs, linked to geopolitical tensions, added further pressure.
Sales totalled 183,714 tonnes for the quarter, while stock at period end stood at roughly 94,000 tonnes, higher than anticipated.
The loan carries interest at the South African prime overdraft rate plus 6%, compounded monthly, with no fixed term and repayment due on demand from UBI with 15 business days' notice.
Existing security arrangements tied to ARC Fund's prior facilities will be extended to give UBI first ranking priority, with ARC moving to second ranking, through an omnibus agreement.
The company said it will update the market on drawdown of the loan in due course.
